Existing Home Sales about in line but inventories move higher

Feb Existing Home Sales, which measure closings of contracts likely signed in the Nov-Dec timeframe, totaled 5.02mm annualized, down from 5.05mm in Jan and a touch above expectations of 5.0mm. Single family sales fell but were partially offset by a gain in condos/co-ops. BUT, because the absolute number of homes for sale rose by 312k, the inventory to sales ratio rose to 8.6 months from 7.8 and now is at the highest since Aug ’09. The median price fell 1.8% y/o/y to $165,100. Even though contracts were mostly signed late last year, the NAR is saying that the bad Feb weather may have impacted the timing of closings but they do say that “the housing recovery is fragile at the moment.” Distressed sales made up 35% of sales and that 42% of buyers were first time vs 40% in Jan. The home buying tax credit expires at the end of April and time is running out. Bottom line, the next big test for this phase of the housing recovery is just ahead.

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