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Economy in Brief

U.S. Existing Home Sales Improve Further To Highest Since 2007
by Tom Moeller December 22, 2009

The front-end of the economy is improving markedly. The National Association of Realtors reported that November sales of existing homes again rose sharply to the highest level since February 2007. The 7.4% m/m increase to 6.540M units (SAAR) followed a little-revised 9.9% rise during October. The latest was the fourth strong gain in five months and it raised sales 45.7% from the January low. The gain in November home sales greatly exceeded Consensus expectations for a rise to 6.25M.

Total sales include sales of condos and co-ops. Sales of existing single-family homes alone increased a sharp 8.5% to 5.770M (42.1% y/y) last month and were up 42.5% from the January low. (These data have a longer history than the total sales series). Sales of condos and co-ops were unchanged m/m and were up by 60.1% from last November.

Sales have been helped by a recently extended tax credit for first-time home buyers. The credit of up to $8,000 now runs though early next year. The full details of the home-buyer tax credit can be found here.

The median price of all existing homes rose slightly to $172,600 after four consecutive months of decline. Nevertheless, the y/y decline  moderated to 4.3% from its worst of -17.5% as of January and prices have risen 4.7% from the low. The median price for a single-family home alone was little-changed at $171,900 (-4.4% y/y). Price weakness has sharply raised home affordability; by 7.2% since July and by roughly two-thirds from the 2006 low.

The number of unsold homes (single-family & co-ops) for sale fell 1.3% (-15.5% y/y) during November and to the lowest level since December 2006. At the current sales rate there was a 6.5 months' supply of homes on the market which was the lowest since December 2006. The latest figure was down from a high of 11.3 months during April of last year. For single-family homes, the inventory fell to a 6.2 month's supply, also the lowest since December 2006.

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. 

Existing Home Sales (Thous, SAAR) November October September Nov. Y/Y 2008 2007 2006
Total 6,540 6,090 5,540 44.1% 4,893 5,674 6,516
  Northeast 1,130 1,060 950 52.7 845 1,010 1,093
  Midwest 1,550 1,430 1,250 53.5 1,130 1,331 1,494
  South 2,390 2,280 2,040 44.8 1,860 2,243 2,577
  West 1,460 1,320 1,290 28.1 1,064 1,095 1,357
Single-Family 5,770 5,320 4,860 42.1 4,341 4,960 5,712
Median Price, Total, $ (NSA) 172,600 172,200 176,000 -4.3 197,233 216,633 222,042

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