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 10/24/07 For Sep 2007 | ||||||||||||
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Highlights
Things are looking worse for the housing sector. September existing homes sales fell to a much lower rate than expected, down 8 percent in the month to a 5.040 million annual rate. Sales were down across regions. Prices are coming down, at a median $211,700 and down 5.7 percent from $224,400 in August. Prices have shown resilience in prior months despite very bloated supply which remains so at 10.5 months in September, the highest level since 1999.
Data for the series actually only go back to 1999. The headline rate of 5.040 million is in fact the lowest of the series, and just above 5.080 million hit twice in 1999.
A look at year-on-year rates shows the depth of the ongoing downturn with the year-on-year decline for sales at 19.1 percent, marking a step lower from recent months and the worst on record. But the median price is down only 4.2 percent on the year. A drop in home prices would signal new weakness in consumer spending.
Treasuries firmed and the dollar slipped in reaction to the data which point to weakness for tomorrow's new home sales data. Similar weakness in that report would raise a new level of concern over the housing sector.
Existing home sales fell 4.3 percent in August to a 5.50 million annual rate. The worst part of the report, however, was supply rising to a new record at 10.0 months. The glutted market is impacting prices as the median price slipped 1.8 percent for the month to $224,500.
Existing home sales Consensus Forecast for September 07: 5.30 million-unit rate
Range: 4.95 to 5.8 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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