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Economy in Brief

U.S. Existing Home Sales Improve As Prices Fall
by Tom Moeller   October 25, 2010

Price discounts seem to have buoyed home sales last month. The National Association of Realtors reported that sales of existing homes during September increased 10.0% to 4.53M following a little revised 7.3% August increase. September sales were slightly better than Consensus expectations for 4.30M. Total sales include sales of condos and co-ops. Sales of existing single-family homes alone rose 10.0% (-19.5% y/y) from August to 3.97M. (These data have a longer history than the total sales series.) Sales of condos and co-ops rose 9.8% m/m but remained down 16.2% from last year.

Lower prices may have helped prompt last month's sales improvement. The median price of all existing homes fell 3.3% m/m to $171,700, the third consecutive monthly decline. Though prices remained off one quarter from the 2007 peak, they have risen 4.3% from the February low. The price of a single-family home fell 3.1% to $172,600 (-1.9% y/y). Earlier price weakness sharply raised home affordability -- by two-thirds from the 2006 low, though very recent price improvement has stalled. The median family income for existing home buyers was $60,498, and mortgage payments amounted 14.9% of that total.

The number of unsold homes (single-family & co-ops) for sale slipped in September to 4.040 mil. but were up 8.9% y/y. At the current sales rate, the months' supply of homes on the market fell m/m to 10.7, just off the record high. For single-family homes, the inventory also fell m/m to a 10.2 months' supply.

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.

Fed Chairman Bernanke's opening remarks at today's Federal Reserve conference on Mortgage Foreclosures and the Future of Housing are available here.

Existing Home Sales (Thous, SAAR) September August July Y/Y % 2009 2008 2007
Total 4,530 4,120 3,840 -19.1 5,160 4,893 5,674
 Northeast 760 690 630 -20.8 863 845 1,010
 Midwest 950 830 800 -26.4 1,166 1,130 1,331
 South 1,770 1,600 1,540 -14.9 1,913 1,860 2,243
 West 1,050 1,000 870 -16.7 1,216 1,064 1,095
Single-Family Sales 3,970 3,610 3,370 -19.5 4,573 4,341 4,960
Median Price, Total, $(NSA) 171,700 177,500 182,100 -2.4 172,742 197,233 216,633
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