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Economy in Brief

U.S. Existing Home Sales And Prices Rise
by Tom Moeller June 23, 2009

The National Association of Realtors reported that sales of existing homes rose 3.6% from May to the highest level since last October. Recent sales have been helped by a tax credit for first-time home buyers. The latest increase to 4.89M (AR) units beat Consensus expectations for sales of 4.85M homes. Total sales include sales of condos and co-ops. Sales of existing single-family homes alone increased 2.4% last month and they were up 6.7% from the January low. Despite the recent gains, however, sales remained near the lowest level since July 1997. (These data have a longer history than the total sales series).

The recently enacted tax credit is for first-time home buyers of either a new or a pre-owned home. The credit of up to $8,000 extends through the rest of this year. The full details of the home-buyer tax credit can be found here

Home affordability fell somewhat from its record high to the lowest level this year. The decline was the result of the second consecutive, 4%+ m/m increase in home prices to a median $181,800. Nevertheless, affordability remained up by one-third from the year ago level as home prices remained down 20% from the 2007 peak. The series dates back to 1971.

The number of unsold homes (condos & single-family) on the market fell again, posting a 0.7% decline during June. Year-to-year inventories are down 14.9%. At the current sales rate there was a 9.4 months' supply on the market which was near the lowest since late-2007. For single-family homes the inventory was unchanged m/m (-17.9% y/y). At the current sales rate there was an 8.9 month's supply of homes on the market, near the lowest since 2007.

The data on existing home sales, prices and affordability can be found in Haver's USECON database. The regional price, affordability and inventory data is available in the REALTOR database.

What Do We Know (And Not Know) About Potential Output from the Federal Reserve Bank of St. Louis can be found here.

Existing Home Sales (Thous) June May Y/Y 2008 2007 2006
Total 4,890 4,720 -0.2% 4,893 5,674 6,516
  Northeast 820 800 -4.7 845 1,010 1,093
  Midwest 1,100 1,090 -1.8 1,130 1,331 1,494
  South 1,810 1,740 -3.7 1,860 2,243 2,577
  West 1,160 1,090 11.5 1,064 1,095 1,357
Single-Family 4,320 4,220 0.2 4,341 4,960 5,712
Median Price, Total, $ 181,800 174,700 -15.4 197,250 216,633 222,042
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