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Daily Global Commentary

Sales of Existing Homes Advance, Inventories Flat, and Prices Falling Less Rapidly

Sun, Aug 23 2009, 21:59 GMT
by Northern Trust Economic Research Department

Northern Trust  |  View company's profile


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Sales of Existing Homes Advance, Inventories Flat, and Prices Falling Less Rapidly

Sales of all existing homes rose 7.2% to an annual rate of 5.24 million units during July, marking the fourth consecutive monthly gain. Purchases of existing single-family homes increased 6.5% to an annual rate of 4.61 million units. Sales of existing single-family homes have now risen 13.8% from the record low of 4.05 million units in January 2009. The $8000 tax credit is believed to have contributed to the increase sales of existing homes.

The median price of an existing single-family home dropped 2.0% in July from the prior month to $178,300. The median sales price of an existing single-family home is down 14.7% from a year ago. This represents an improvement from the record 16.9% drop recorded in April of 2009.

Seasonally adjusted inventories of existing single-family homes were virtually flat (8.24 months supply) compared with the situation in June (8.26 months supply). The peak of the inventories-sales ratio occurred in January 2009 (13.3 months). The median inventories-sales ratio is 7.2-month supply, which implies that the inventories sales ratio needs to make a significant breakthrough to match the historical median. In sum, the housing sector continues to present a fragile recovery, at the least.



Legal disclaimer and risk disclosure

The information herein is based on sources which The Northern Trust Company believes to be reliable, but we cannot warrant its accuracy or completeness. Such information is subject to change and is not intended to influence your investment decisions.
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