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Economy in Brief

U.S. Existing Home Sales Jump; Prices Near 10-Year Low
by Tom Moeller  February 23, 2011

For the fifth month in the last six, the National Association of Realtors reported a rise in existing home sales. Despite severe winter storms, the January gain of 2.7% to 5.560M from a revised 5.220M in December was to the highest level since May of last year. The last exceeded Consensus expectations for sales of 5.22M. (Figures back to 2008 were revised.) Total sales include sales of condos and co-ops. Sales of existing single-family homes alone rose 2.4% (4.9% y/y) from December to 4.690M. (These data have a longer history than the total sales series.) Sales of condos and co-ops rose 4.7% m/m (7.9% y/y).

The median price of all existing homes fell 5.9% m/m to $158,800, the largest decline of the last seven months. Prices reached the lowest level since April 2002. The price of a single-family home fell 5.8% last month to $159,400 (-2.7% y/y). Price weakness has raised home affordability to a record high, up more than two-thirds from the 2006 low. Mortgage interest rates rose to 4.69% during December. The median family income for existing home buyers was $62,423 and mortgage payments amounted to 13.5% of that total.

The number of unsold homes (single-family & co-ops) for sale fell in January to 3.380M but were up 3.1% y/y. At the current sales rate, the months' supply of homes on the market fell m/m to 7.6, near the cycle low and well off the record high of 12.5. For single-family homes, the inventory also fell m/m to a 7.5 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 are available in the REALTOR database.

Existing Home Sales (Thous, SAAR) Jan Dec Nov Y/Y% 2010 2009 2008
Total 5,360 5,220 4,640 5.3 4,918 5,149 4,894
  Northeast 830 870 770 -1.2 825 863 848
  Midwest 1,140 1,120 980 3.6 1,076 1,168 1,128
  South 2,020 1,950 1,790 8.0 1,861 1,907 1,857
  West 1,370 1,270 1,120 7.0 1,155 1,214 1,062
Single-Family Sales 4,690 4,580 4,080 4.9 4,311 4,559 4,337
Median Price, Total, ($, NSA) 158,800 168,800 170,200 -3.7 172,458 172,742 197,233
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