Jan New Home Sales, which measure contract signings of new homes, totaled 309k, 45k less than expected and down from 348k in Dec. It is the lowest on record dating back to 1963 when the US population was 190mm vs 310mm today and highlights the extreme overhang that still exists in existing homes. Months supply rose to 9.1 from 8.0 and is back to the highest since May ’09 but remains below the high in this cycle of 12.4 in Jan ’09. The absolute number of homes for sale rose slightly to 234k from 233k. Sales fell in the Northeast, South and West but rose a touch in the Midwest. The median price fell 2.4% y/o/y and 5.6% m/o/m to $203,500, the lowest since Dec 2003. Combining this data point with today’s MBA report saying that purchases fell to the lowest level since 1997 and it gives reason to the Fed to keep rates as low as possible for as long as possible regardless of what this formula created in the ’03-’07 timeframe.
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