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Economy in Brief

U.S. Existing Home Sales Improve
by Tom Moeller  November 19, 2012

The National Association of Realtors reported that sales of existing homes increased 2.1% during October to a 4.790M annual rate. The gain followed a downwardly revised 2.9% September decline to 4.690M, initially reported as 4.750M. The latest compared to Consensus expectations for 4.75M sales. Sales of existing single-family homes alone rose 1.9% to 4.220M, up 9.6% y/y. (These data have a longer history than the total sales series). Sales of condos and co-ops rose 3.6 m/m to 0.570M, up 21.3% y/y.

Home pricing improved slightly. The median price of an existing home ticked up 0.2% (+11.1% y/y) to $178,600 following three straight months of decline. In the West, the median price rose 21.2% y/y to $242,100. In the Northeast, the median sales price of $232,600 was up 4.6% y/y. In the South, the price of $152,200 was up 8.2% y/y and in the Midwest the price rose 10.6% y/y to $145,600.

The supply of homes on the market fell to a six year low of 5.4 months. The months' supply of single-family homes on the market slipped to 5.4 and for condos & coops it fell to 5.3 months. The total number of homes on the market continued its steady decline and fell 1.4% m/m, down 21.0% y/y. Inventories of single-family homes fell 20.9% y/y while inventories of multi-family homes fell 26.9%.

Reported earlier this month, the composite index of home price affordability rose slightly for the third consecutive but slipped 0.5% y/y. Mortgage payments as a percent of income slipped m/m to 13.2% versus the high of roughly 25.0% in 2006. The average monthly mortgage rate ticked down to 3.68%.

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. The expectations figure is in the AS1REPNA database. Estimating a Structural Model of Herd Behavior in Financial Markets from the Federal Reserve Bank of New York can be found here

Good Intentions in the Short Term with Risky Consequences for the Long Term is the title of last week's speech by Charles I. Plosser, President and CEO of the Federal Reserve Bank of Philadelphia and it can be found here.

Existing Home Sales (Thous, SAAR) Oct Sep Aug Y/Y% 2011 2010 2009
Total 4,790 4,690 4,830 10.9 4,283 4,181 4,329
Northeast 580 590 630 13.7 544 563 580
Midwest 1,110 1,090 1,110 18.1 920 908 975
South 1,920 1,880 1,920 11.0 1,685 1,626 1,640
West 1,180 1,130 1,170 3.5 1,133 1,083 1,134
Single-Family Sales 4,220 4,140 4,290 9.6 3,797 3,704 3,868
Median Price, Total, ($, NSA) 178,600 178,300 184,900 11.1 164,542 172,442 172,783
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