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

Bottom Line: Existing home sales rose slightly in January to their highest level since July. Home re-sales have averaged 5.26 million over the past 3 months and 5.30 million over the past 6 months, suggesting that the housing market trend is little changed. Inventories of homes available for sale climbed modestly; but the months’ supply rose only slightly. On a year-over-year basis, prices are modestly higher. Existing Home Sales ROSE by 0.4% in January to 5.47 million, the highest level since July, compared with market expectations for a decrease to 5.33 million. The prior month was revised down slightly from 5.46 to 5.45 million. Home re-sales are now 11.0% ABOVE their year ago level but they are still 24.6% BELOW their September 2005 record high. The year-over-year rate increased for the 2nd consecutive month. The Inventory of Homes Available for Sale ROSE by 3.4% to 1,820k but are still 2.2% BELOW their year ago level. Foreclosures and short sales accounted for 9% of January sales, up from 8% in December but still down from 11% a year ago. Because inventories increased more than sales, the Months Supply ROSE to 4.0 months from 3.9 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 4.8% ABOVE their year ago levels while median home prices are 8.2% ABOVE their year ago levels. There is a broad general improvement in home prices.