Existing home sales still reflecting tax credit

June Existing Home Sales were a better than expected 5.37mm annualized vs the forecast of 5.1mm BUT remember, this reflects closings where the contracts were likely signed BEFORE the expiration of the home buying tax credit on Apr 30th and sales are down from 5.66mm in May. However, even with the better sales number, months supply rose to 8.9 from 8.3 to the highest since Aug ’09 as the absolute number of homes for sale rose by 99k to 3.992mm homes. Sales fell in the West, South and Midwest but rose in the Northeast. Distressed sales made up 32% of the total and the median price rose 1% y/o/y. Bottom line, the data reflects the ‘old’ economics for 1st time home buyers and looking out to the rest of the year, “only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels,” says the NAR chief economist.

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