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Economy in Brief

U.S. Existing Home Sales Drop to Three-Year Low
by Gerald D. Cohen  January 22, 2019

The National Association of Realtors reported that sales of existing homes fell a greater-than-expected 6.4% in December to 4.990 million units (SAAR). This was the lowest reading and largest month-on-month decline since a regulatory-change-driven divot in sales in November 2015. In the year ending December 2017, existing home sales are down 10.3%, the biggest drop since May 2011. The Action Economics Forecast Survey expected sales of 5.22 million units. November's reading was revised slightly higher to 5.33 million.

The median price of all existing homes sold declined 1.4% (+2.9% y/y) last month to $253,600. Prices hit a record $273,800 in June. The average sales price fell 1.1% (+1.6% y/y) to $292,800. Sales price data is not seasonally adjusted, so it is not surprising that prices declined month-on-month in December.

Existing home sales weakened in every region of the country. The Midwest led the decline with a drop of 11.2% (-10.5% y/y) to an almost two-year low of 1.19 million. The Northeast fell 6.8% (-6.8% y/y) and the South was down 5.4% (-8.7% y/y). There was no sign of rebound from the wildfire-driven November weakness in the West as sales softened 1.9% (-15.0% y/y).

Sales of existing single-family homes dropped 5.5% (-10.1% y/y) to 4.45 million units, the weakest reading in three years. Sales of condos and co-ops plummeted 12.9% (-11.5% y/y) to 540,000 units, the lowest level since July 2012.

The number of homes on the market fell for the sixth consecutive month, but remained up 6.2% y/y. The months' supply of homes on the market declined to 3.7, the least since March.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors and 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 from the Action Economics Forecast Survey, reported in the AS1REPNA database.

Existing Home Sales (SAAR, 000s) Dec Nov Oct Y/Y % 2018 2017 2016
Total 4,990 5,330 5,220 -10.3 5,343 5,536 5,441
   Northeast 690 740 690 -6.8 688 737 735
   Midwest 1,190 1,340 1,270 -10.5 1,266 1,304 1,298
   South 2,090 2,210 2,150 -8.7 2,248 2,270 2,217
   West 1,020 1,040 1,110 -15.0 1,141 1,225 1,192
Single-Family 4,450 4,710 4,620 -10.1 4,746 4,910 4,825
Median Price Total ($, NSA) 253,600 257,300 255,100 2.9 257,175 245,950 232,067
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