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Existing Home Sales: Two Months of Better Data, But Trend Still Lower

December 19, 2018

Bottom Line: Existing home sales rebounded modestly more than expected for the second straight month. But November's tally was still below the 12-month average rate, suggesting the last two months were not enough to change the trend, which is modestly lower. Home re-sales have averaged 5.23 million over the past 3 months and 5.29 million over the past 6 months. Prices rose - here the the trend is towards modestly higher prices as inventories remain tight.

Existing Home Sales ROSE by 1.9% in November to 5.32 million, compared with market expectations for a decline to 5.20 million. There were no revisions to prior data. Home re-sales are now 7.0% BELOW their year ago level and are 26.6% BELOW their September 2005 record high.

The Inventory of Homes Available for Sale FELL by 5.9% to 1,740k but are still 4.2% ABOVE their year ago level. Because inventories declined while sales increased, the Months Supply FELL to 3.9 months from 4.3 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 2.3% ABOVE their year ago levels while median home prices are 4.2% ABOVE their year ago levels.

Article by Contingent Macro Advisors