Filed under: Bad news, Economic data, Housing
Sales of existing homes and condominiums in January 2008 totaled a seasonally-adjusted annual rate of 4.89 million units, the National Association of Realtors announced Monday. The January statistic was roughly in-line with the 4.84 million consensus estimate.
The January 2008 stat was also 0.4% lower than the revised 4.91-million-unit December 2006 annualized rate, and was also the lowest sales pace since the NAR started tracking combined sales in 1999.
Further, on a year-over-year basis, resales plunged 23.4% compared to January 2007.
Housing’s doldrums continue
Economist Steve Affinito stated the song remains the same regarding the U.S. housing sector.
“Clearly, with this report adults are continuing to delay their home purchases, which is a rational tactic, because they believe home prices will continue to drop, and there’s a very good chance they will for at least the next two quarters, and probably longer,” Affinito stated. “The housing sector remains in a pronounced recession. We did hit the consensus estimate for home resales in January 2008, but keep in mind that economists have lowered their expectations regarding home sales.”
Meanwhile, inventories rose 5.5% during the month to an annualized rate of 4.19 million units, which represents about a 10 month supply at current sales rate. Inventories are up 18.4% compared to January 2007.
In addition, the median sales price of all units fell 4.6% to $201,000 compared to January 2007. The median price of a single-family home fell 5.1% to $198,700, while condominiums / co-ops declined 1% to $220,400.
Resales fell in three of the four regions of the U.S.: Northeast, -3.6%; West, -2.1%; South, -0.5%. Sales in the Midwest rose 3.4%.
A concern: rising inventories
Affinito stated rising home inventories and lower median sales price are equally distressing to economists.
“We now have a 10 month supply of existing homes, when 4-5 months is the norm. That’s an unusually big number of homes on the market, and the inventory increase is indicative of a housing sector that still hasn’t bottomed,” Affinito said. “That’s also reflected in the lower median sales price. So long as inventories continue to build there will be a downward pressure on prices. We just have very poor housing sector conditions right now and it’s making it very hard for homeowners to sell their homes.”
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