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Economy in Brief

U.S. Existing Home Sales Highest Since February
by Tom Moeller August 25, 2008

The level of existing homes rose 3.1% last month to 5.00 million. The figure, reported by the National Association of Realtors, more than made up a 2.8% decline during June and the rise lifted sales to the highest level since February. The figure was firmer than Consensus expectations for a selling rate of 4.91M homes. Total sales include sales of condos and co-ops.

Sales of existing single-family homes also made up (most) of their June decline and rose 3.1%. These sales (which have a longer history than the total) were still near the lowest level since early-1998.

By region, home sales in the West rose a sharp 9.7% (+0.9% y/y). They were up by more than one-quarter from last October's low. Sales in the Northeast also were firm and rose 5.9%. In the Midwest, however, sales posted only a modest 0.9% increase and in the South sales ticked 0.5% lower. These sales remained near the lowest level since 2000.

Median home prices last month reversed just some of their June rise with a 1.3% decline. Nevertheless, prices were up 8.6% from the February low.

The number of unsold homes (condos & single-family) on the market rose 3.9% from June (2.4% y/y). At the current sales rate the inventory rose slightly to an 11.2 months supply which is the record high for this series. For single-family homes, however, the inventory was unchanged m/m (1.8% y/y) and that amounted to 10.6 months supply at the current sales rate. That was still near the highest supply since 1985.

Divorcing Money from Monetary Policy from the Federal Reserve Bank of New York can be found here.

Signal or Noise? Implications of the Term Premium for Recession Forecasting, also from the Federal Reserve Bank of New York, is available here.

Existing Home Sales (Thous) July y/y % June July '07 2007 2006 2005
Total 5,000 -13.2 4,850 5,760 5,672 6,508 7,076
  Northeast 900 -11.8 850 1,020 1,008 1,090 1,168
  Midwest 1,120 -17.0 1,110 1,350 1,331 1,491 1,589
  South 1,850 -18.1 1,860 2,260 2,240 2,576 2,704
  West 1,130 0.9 1,030 1,120 1,093 1,353 1,617
Single-Family 4,390 -12.4 4,260 5,010 4,958 5,703 6,181
Median Price, Total, $ 212,400 -7.1 215,100 228,600 216,617 222,000 218,217
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