Global| Oct 23 2009U.S. Existing Home Sales Jump But Prices Decline Again
by:Tom Moeller
|in:Economy in Brief
Summary
Home sales continue to recover, helped by lower prices. The National Association of Realtors reported that September sales of existing homes rose sharply to the highest level since July 2007. The 9.4% m/m increase to 5.570M units [...]
Home sales continue to recover, helped by lower prices. The National Association of Realtors reported that September sales of existing homes rose sharply to the highest level since July 2007. The 9.4% m/m increase to 5.570M units (SAAR) followed a 2.9% July decline that was little revised. Moreover, the increase in September home sales outpaced Consensus expectations for a rise to 5.35M. Total sales include sales of condos and co-ops.
Sales of existing single-family homes alone similarly increased a sharp 9.4% to 4.890M last month and were up 20.7% from the January low. (These data have a longer history than the total sales series).
Recent sales have been helped by a tax credit for first-time home buyers. The credit of up to $8,000 extends though the end of this year. The full details of the home-buyer tax credit can be found here.
The median price of an existing home fell for the third straight month, to $174,900. Though prices were still lower than the year-ago level, they have risen 6.1% from the January low. The median price for a single-family home was $174,900 (-8.1% y/y). These price declines have sharply raised home affordability. During August, the composite index of home affordability reversed all of its July decline and rose 2.3%. It was up 26.5% from August of last year but down 10.1% from its January peak due to a limited decline in interest rates.
Perhaps due to lower prices, potential sellers put fewer homes on the market. The number of unsold homes (condos & single-family) for sale fell 7.5% (-15.0% y/y) during September to near the lowest level since January 2007. Year-to-year inventories were down 15.0%. At the current sales rate there was a 7.8 months' supply on the market which was near the lowest since early-2007. The latest figure was down from a high of 11.3 months early last year. For single-family homes the inventory fell 9.1% m/m (-16.7% y/y). At the current sales rate there was a 7.6 month's supply of homes on the market, the lowest since early-2007.
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.
Financial Regulation and Supervision after the Crisis: The Role of the Federal Reserve is the title of this morning's speech by Fed Chairman Ben S. Bernanke and it is available here.
| Existing Home Sales (Thous, SAAR) | September | August | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Total | 5,570 | 5,090 | 9.2% | 4,893 | 5,674 | 6,516 |
| Northeast | 950 | 910 | 11.8 | 845 | 1,010 | 1,093 |
| Midwest | 1,250 | 1,140 | 7.8 | 1,130 | 1,331 | 1,494 |
| South | 2,060 | 1,890 | 10.8 | 1,860 | 2,243 | 2,577 |
| West | 1,300 | 1,150 | 5.7 | 1,064 | 1,095 | 1,357 |
| Single-Family | 4,890 | 4,470 | 7.7 | 4,341 | 4,960 | 5,712 |
| Median Price, Total, $ | 174,900 | 177,300 | -8.5 | 197,250 | 216,633 | 222,042 |
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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