Global| Aug 24 2010U.S. Existing Home Sales Collapse In Wake Of Tax Credit Expiration
by:Tom Moeller
|in:Economy in Brief
Summary
Sales of existing homes showed the full effect last month of the expiration of the Federal home-buyer tax credit. July sales of existing homes collapsed 27.2% to 3.83M following modest declines during the prior two months, according [...]
Sales of existing homes showed the full effect last month of the expiration of the Federal home-buyer tax credit. July sales of existing homes collapsed 27.2% to 3.83M following modest declines during the prior two months, according to the National Association of Realtors. July sales were well short of Consensus expectations for sales of 4.63M. Total sales include sales of condos and co-ops. Sales of existing single-family homes alone fell 27.1% (-25.6% y/y) from June to 3.37M. (These data have a longer history than the total sales series). Sales of condos and co-ops fell 24.0% from last year.
Despite the sales weakness, the median price of all existing homes held roughly steady m/m at $182,600 compared to a downwardly revised June level. Though prices remained off roughly 25% from the 2007 peak, they have risen 12.0% from the January low. The price of a single-family home slipped 0.1% to $183,400 (+0.7% y/y). Earlier price weakness sharply raised home affordability -- by more-than-half from the 2006 low, though recent price gains have lowered affordability moderately. The recent rise in home prices lowered homes' affordability by 2.2% versus one year ago. The median family income for existing home buyers was $60,498 and mortgage payments amounted to 15.7% of that total.
The number of unsold homes (single-family & co-ops) for sale rose in July after two months of decline but were down 1.9% y/y. At the current, lower, sales rate the months' supply of homes on the market surged to a record 12.5. For single-family homes, the inventory rose m/m to an 11.9 months' supply, also a record.
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
Reasonable People Did Disagree: Optimism and Pessimism About the U.S. Housing Market Before the Crash from the Federal Reserve Bank of Boston is available here.
| Existing Home Sales (Thous, SAAR) | July | June | May | July Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | 3,830 | 5,260 | 5,660 | -25.5% | 5,160 | 4,893 | 5,674 |
| Northeast | 620 | 880 | 890 | -30.3 | 863 | 845 | 1,010 |
| Midwest | 800 | 1,230 | 1,330 | -33.3 | 1,166 | 1,130 | 1,331 |
| South | 1,540 | 1.990 | 2,150 | -19.8 | 1,913 | 1,860 | 2,243 |
| West | 870 | 1,160 | 1,290 | -23.0 | 1,216 | 1,064 | 1,095 |
| Single-Family Sales | 3,370 | 4,620 | 4,980 | -25.6 | 4,573 | 4,341 | 4,960 |
| Median Price, Total, $ (NSA) | 182,600 | 183,000 | 174,600 | 0.7 | 172,742 | 197,233 | 216,633 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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