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Economy in Brief

U.S. Existing Home Sales Edge Higher, Supply of Homes for Sale Hovers Near Lows
by Carol Stone  February 21, 2012

The National Association of Realtors reported that sales of existing homes edged up 0.4% (+9.1% y/y) in January to a 4.920M annual rate. December's sales were revised downward slightly from 4.94M to 4.90M, representing a decrease of 1.2% from November. Routine annual seasonal adjustment revisions altered the monthly pattern modestly. Consensus expectations had projected a 4.90M pace for January. Sales of existing single-family homes alone increased 0.2% in January to 4.340M, up 8.5% y/y. (These data have a longer history than the total sales series.) Sales of condos and co-ops rose 1.8% m/m to 0.580M, up 13.7% y/y.

The median price of an existing home fell 3.7% (+12.3% y/y) to $173,600. This is a fairly typical drop for January, when prices nearly always decline from December amounts. In the West, the median price surged 26.6% y/y to $239,800. By contrast, in the Northeast, the median sales price of $230,500 was up only 2.4% y/y. In the South, the price of $152,100 was up 13.4% y/y and in the Midwest the price rose 8.6% y/y to $131,800.

The total number of homes for sale continues to decline, producing anecdotal evidence of genuine shortages in some communities. The sum of single-family and condos & coops on the market was 1.740M at the end of January, down 25.3% from a year ago and equal to a 4.2-month supply at current sales rates. Since the advent of this series in 1999, only one month has seen few houses and apartments on the market, 1.714M in December 1999. The months' supply was last as low as 4.2 months in April 2005; its all-time low was 3.6 months in January 2005. Inventories of single-family homes are down 25.5% y/y to 1.550M, while inventories of multi-family homes fell 23.3% y/y in January to 194,000. The months' supply of single-family homes on the market was 4.3 months, and for condos & coops, 4.0 months, both lows since the spring of 2005.

Reported earlier this month, the composite index of home price affordability rose 0.2% y/y in December. Mortgage payments as a percent of income remained at 12.5% for a third month versus the high of roughly 25.0% in 2006. The average monthly mortgage rate fell 7 basis points to 3.43%.

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.


Existing Home Sales (Thous, SAAR)
Jan Dec Nov Y/Y% 2012 2011 2010
Total 4,920 4,900 4,960 9.1 4,661 4,278 4,183
Northeast 650 620 610 12.1 596 543 563
Midwest 1,160 1,120 1,170 17.2 1,067 918 909
South 1,960 1,940 1,990 14.0 1,833 1,683 1,626
West 1,150 1,220 1,190 -5.7 1,165 1,133 1,084
Single Family Sales 4,340 4,330 4,360 8.5 4,130 3,793 3,705
Median Price, Total, ($, NSA) 173,600 180,200 179,400 12.3 175,442 164,542 172,442
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