Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors) Why Investors Care
| Released on 1/25/07 For Dec 2006 | ||||||||||||
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Highlights
Existing home sales slipped 0.8 percent in December to a 6.22 million annual rate, slightly lower than expected but still consistent with a stable bottoming in the housing market. The text of the report in fact cited a "bottoming out" in sales. December data offer a full-year view of the housing slowdown as 2006 sales totaled 6.480 million, 8.4 percent below 2005's robust total of 7.075 million.
The slowdown has backed up inventories, which however eased in December to 6.8 months from a very high 7.3 months in November. High inventories are a negative for future construction and also for future prices, though the median price in December held firm, up 2.3 percent in the month to $222,000. Prices have held up better than sales with the year-on-year comparison unchanged. Prices of new homes have held up best, showing a solid 5.8 percent year-on-year gain in November. December's new home sales report will be released tomorrow.
Treasuries firmed slightly in reaction to the weaker-than-expected headline.
Existing home sales rose 0.6 percent in November to 6.280 million units. Gains were led by the condos component but the single-family category did show a modest gain. Currently, the key indicator that everyone is watching in housing is the supply number. Supply did edge down 1 tenth to 7.3 months in November but supply still needs to come down further before starts really pick up.
Existing home sales Consensus Forecast for December 06: 6.25 million-unit rate
Range: 6.05 to 6.35 million-unit rate
![[Chart]](chart.gif)
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Existing home sales reached a peak in mid-2005 and have been easing since. Typically, a distinct reverse relationship exists between home sales and mortgage rates. |
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