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Economy in Brief

U.S. Existing Home Sales Rise With Distress Sales & Tax Credit
by Tom Moeller August 21, 2009

The National Association of Realtors reported that sales of existing homes during July jumped for the fourth consecutive month. The 7.2% m/m rise to 5,240 (SAAR) was to the highest level since August of 2007. The increase in July sales beat Consensus expectations for sales of 5.00M homes. Total sales include sales of condos and co-ops.

Sales of existing single-family homes alone increased 5.5% last month and were up 13.8% from the January low. (These data have a longer history than the total sales series).

Recent sales have been helped by a tax credit for first-time home buyers. The credit of up to $8,000 extends though the end of this year. The full details of the home-buyer tax credit can be found here.

The improvement in home sales looks to have inspired potential sellers to put more homes on the market. The number of unsold homes (condos & single-family) for sale rose 7.3% during July to the highest level since November. Nevertheless, year-to-year inventories were down 10.6%. At the current sales rate there was a 9.4 months' supply on the market. The figure was stable with June and was near the lowest since June 2007. For single-family homes the inventory rose 3.1% m/m (-13.2% y/y). At the current sales rate there was an 8.6 month's supply of homes on the market, the lowest since 2007.

The median price of an existing home dipped m/m to $178,400. Though prices were still lower than the year ago level, they have risen by 8.3% from the January low.

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.

Reflections on a Year of Crisis is the title of this morning's speech by Fed Chairman Ben S. Bernanke in Jackson Hole, Wyoming and it is available here.

Existing Home Sales (Thous, SAAR) July June Y/Y 2008 2007 2006
Total 5,240 4,890 5.0% 4,893 5,674 6,516
  Northeast 930 820 3.3 845 1,010 1,093
  Midwest 1,220 1,100 8.0 1,130 1,331 1,494
  South 1,950 1,820 5.4 1,860 2,243 2,577
  West 1,130 1,150 1.8 1,064 1,095 1,357
Single-Family 4,610 4,330 5.0 4,341 4,960 5,712
Median Price, Total, $ 178,400 182,000 -15.1 197,250 216,633 222,042
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