Existing Home Sales: Sales Drop, Inventories Increase, Prices Climb

March 21, 2016
Bottom Line: Existing home sales fell moderately in February, more than expectations, to their lowest level since November. Home re-sales have averaged 5.33 million over the past 3 months and 5.27 million over the past 6 months, suggesting that the housing market is still continuing to improve. Inventories of homes available for sale climbed modestly and months’ supply rose slightly. On a year-over-year basis, prices were modestly higher. Existing Home Sales FELL by 7.1% in February to 5.08 million, the lowest level since November, compared with market expectations for a decrease to 5.31 million. Home re-sales are now 2.2% ABOVE their year ago level but they are still 29.9% BELOW their September 2005 record high. The year-over-year rate increased for the 3rd consecutive month. The Inventory of Homes Available for Sale ROSE by 3.3% to 1,880k but are still 1.1% BELOW their year ago level. Foreclosures and short sales accounted for 10% of February sales, up from 9% in January and down from 11% a year ago. Because inventories increased while sales declined, the Months Supply ROSE to 4.4 months from 4.0 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and even BELOW the 6 month level that is considered 'normal'. Home Prices ROSE compared to their year ago levels. Average home prices are 2.5% ABOVE their year ago levels while median home prices are 4.4% ABOVE their year ago levels. There has been a modest increase in home prices over the past 12 months.
Article by contingentmacro