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Economy in Brief

U.S. Existing Home Sales Remain Depressed
by Tom Moeller March 23, 2010

It probably was the weather that helped depress home sales last month. The National Association of Realtors reported that sales of existing homes fell 0.6% from January as winter storms again blanketed the East and Midwest regions. The slip to 5.0200M units (SAAR) followed a little-revised 7.2% January decline and a sharper 16.2% December slump. February sales were the lowest since last June and roughly matched Consensus expectations. Total sales include sales of condos and co-ops. Sales of existing single-family homes alone fell a larger 1.4% from January to 4.370M. (These data have a longer history than the total sales series). Sales of condos and co-ops rose by nearly one-third from the last year.

Sales have been helped by a recently extended tax credit for first-time home buyers. The credit of up to $8,000 which runs though April 30. Additionally, a new credit of up to $6,500 is available to some existing home owners who move. The full details of the home-buyer tax credit can be found here.

The median price of all existing homes was roughly unchanged last month at $165,100 but off 30% from the 2007 peak. The price of a single-family home inched up m/m to $164,300 (-2.1% y/y). Price weakness sharply raised home affordability; by 7.8% since July and by two-thirds from the 2006 low. The median family income for existing home buyers was $60,494 and mortgage payments amounted to 14.1% of that total.

The number of unsold homes (single-family & co-ops) for sale rose 9.5%. However, it was down from last year and near the lowest since 2006. At the current sales rate there was an 8.6 months' supply of homes on the market. The latest figure was up m/m due to depressed sales but still down from a high of 11.3 months during April of 2008. For single-family homes, the inventory rose m/m to an 8.2 months' supply, near the lowest since 2007.

Existing Home Sales (Thous, SAAR) February January December Feb. Y/Y 2009 2008 2007
Total 5,020 5,050 5,440 7.0% 5,160 4,893 5,674
  Northeast 840 820 920 12.0 863 845 1,010
  Midwest 1,110 1,080 1,160 8.8 1,166 1,130 1,331
  South 1,850 1,870 2,020 6.9 1,913 1,860 2,243
  West 1,220 1,280 1,350 3.4 1,216 1,064 1,095
Single-Family Sales 4,370 4,430 4,760 4.3 4,573 4,341 4,960
Median Price, Total, $ (NSA) 165,100 164,900 170,500 -1.8 172,742 197,233 216,633
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