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Economy in Brief

U.S. Existing Home Sales Slide Along Bottom, Prices Down 20%
by Tom Moeller November 24, 2008

During October, U.S. existing home sales reversed most of the prior month's rise and fell 3.1% to 4.980 million, according to the National Association of Realtors. The 3.1% decline followed a revised 4.7% September increase and it was slightly greater than Consensus expectations for which were for a selling rate of 5.00M homes. Total sales include sales of condos and co-ops.

The month-to-month volatility in home sales this year has been near a roughly stable trend line at the 5.0 million unit level, down 11.8% from last year's average.

Median home prices fell 4.2% (NSA) during October for the fourth consecutive monthly drop. That pulled the y/y comparison to -11.3%. Prices have fallen 20.0% since their peak in June 2007.

Sales of existing single-family homes followed a similar pattern as the total and fell 3.3% after a revised 5.3% rise during September. Sales of existing homes are down by one-third from their peak in mid-2005.

By region, home sales in the Midwest led last month's decline with a 6.0% drop and they were down nearly ten percent from last year. In the South sales fell 2.2% m/m (-10.2% y/y). In the West sales slipped 1.6%, however, they were up one-third from last October. Sales in the Northeast fell 1.2% and they were off 17.7% from last year's average.

The number of unsold homes (condos & single-family) on the market fell for the third straight month (-4.5% y/y). Nevertheless, at the current sales rate there as a 10.2 months' supply on the market. That was down from the April peak of 11.2 months. For single-family homes the inventory ticked up m/m to a 9.6 months supply at the current sales rate, down from an 11.0 months supply in June.

The House testimony offered by Fed GovernorRandall S. Kroszner titled the Effects of the financial crisis on small business is available here.

Existing Home Sales (Thous) October y/y % September October '07 2007 2006 2005
Total 4,980 -1.6 5,140 5,020 5,672 6,508 7,076
  Northeast 830 -9.8 840 910 1,008 1,090 1,168
  Midwest 1,100 -9.1 1,170 1,220 1,331 1,491 1,589
  South 1,840 -10.2 1,900 2,050 2,240 2,576 2,704
  West 1,210 37.5 1,230 880 1,093 1,353 1,617
Single-Family 4,430 0.0 4,580 4,430 4,958 5,703 6,181
Median Price, Total, $ 183,300 -11.3 191,400 206,700 216,617 222,000 218,217
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