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Economy in Brief

U.S. Existing Home Sales Unexpectedly Fall Along With Prices
by Tom Moeller September 24, 2009

The National Association of Realtors reported that August sales of existing homes unexpectedly fell following four consecutive months of increase. The 2.7% m/m decline to 5.100M units (SAAR) nevertheless left sales still near the highest level since late-2007. The decline in August sales contrasted with Consensus expectations for a rise to 5.35M. Total sales include sales of condos and co-ops.

Sales of existing single-family homes alone similarly fell 2.8% to 4.480M last month but were up 10.6% 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 median price of an existing home fell for the second straight month, to $177,700. Though prices were still lower than the year ago level, they have risen by 7.8% from the January low. The median price for a single-family home was $177,500 (-12.1% y/y). During August, the composite index of home affordability slipped during July and was down 11.4% from the April high.

In a reversal of the recent trend, potential sellers put fewer homes on the market. The number of unsold homes (condos & single-family) for sale fell 10.8% during August to near the lowest level since early-2007. Year-to-year inventories were down 16.4%. At the current sales rate there was an 8.5 months' supply on the market which was the lowest since mid-2007. The figure was down from 9.3 months during July. For single-family homes the inventory fell 9.1% m/m (-16.7% y/y). At the current sales rate there was an 8.2 month's supply of homes on the market, 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.

Systemic Risk and the Financial Crisis from the Federal Reserve Bank of St. Louis can be found here.

Existing Home Sales (Thous, SAAR) August July Y/Y 2008 2007 2006
Total 5,100 5,240 3.4% 4,893 5,674 6,516
  Northeast 910 930 5.8 845 1,010 1,093
  Midwest 1,140 1,220 0.0 1,130 1,331 1,494
  South 1,890 1,950 1.6 1,860 2,243 2,577
  West 1,160 1,130 7.4 1,064 1,095 1,357
Single-Family 4,480 4,610 2.5 4,341 4,960 5,712
Median Price, Total, $ 177,700 181,500 -12.5 197,250 216,633 222,042
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