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Economy in Brief

Lower Prices Spurred U.S. Existing Home Sales
by Tom Moeller October 24, 2008

The level of September existing homes jumped 5.5% from August to 5.180 million, according to the National Association of Realtors. The rise followed an unrevised 2.2% August decline and beat Consensus expectations for a selling rate of 4.95M homes. Total sales include sales of condos and co-ops.

Median home prices fell 5.7% (NSA) last month for the third consecutive monthly drop. That pulled the y/y comparison to -9.0%. Prices have fallen 16.7% since their peak in April 2007.

Sales of existing single-family homes rose 6.2% after an unrevised 1.4% August decline. The y/y gains in both total sales and sales of single family homes turned positive for the first time since November 2005. Sales of existing homes, nonetheless, are down by one-third from their peak in mid-2005.

By region, home sales in the West led last month's increase with a 16.8% m/m gain. That lifted sales by more than one third versus the year ago level. Sales in the Midwest also rose but by a lesser 4.4%; the y/y change is still a negative 2.5%. In the South rose 2.2% (-7.8% y/y) but sales in the Northeast were off 1.2% (-7.7% y/y).

The number of unsold homes (condos & single-family) on the market fell 1.6% during September (-2.4% y/y) after a 5.2% August drop. At the current sales rate, the inventory fell to a 9.9 months supply versus the April peak of 11.2 months. For single-family homes, however, the inventory fell a bit more to a 9.4 months supply at the current sales rate, down from an 11.0 months supply in June.

Subprime Facts: What (We Think) We Know about the Subprime Crisis and What We Don’t from the Federal Reserve Bank of Boston is available here.

Existing Home Sales (Thous) September y/y % August September '07 2007 2006 2005
Total 5,180 1.4 4,910 5,020 5,672 6,508 7,076
  Northeast 840 -7.7 850 910 1,008 1,090 1,168
  Midwest 1,190 -2.5 1,140 1,220 1,331 1,491 1,589
  South 1,900 -7.8 1,860 2,060 2,240 2,576 2,704
  West 1,250 34.4 1,070 930 1,093 1,353 1,617
Single-Family 4,620 3.8 4,350 4,450 4,958 5,703 6,181
Median Price, Total, $ 191,600 -9.0 203,100 210,500 216,617 222,000 218,217
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