Tuesday, April 22, 2008

Mixed data for existing home sales

Although the headline numbers were disappointing, there were some bright spots in the Existing Home Sales report for March. Although sales were down -19.3 from a year ago and -2.0 from February, actual sales were up +19.9% over February once you strip out the seasonal adjustment. So, there is interest in buying houses, but it is not as strong as a year ago. Also, even with the seasonal adjustment, there was a +2.2 increase in sales for both the Northeast and the West. So, we are seeing unevenness, but not across-the-board weakness.

Although the headline story highlights a -7.7% decline in prices over a year ago, that overlooks the fact that prices are up +2.6% from February and up for both seasonally adjusted and unadjusted prices. Prices were down only in the West. In fact, prices in the Northeast are now higher than any time since last July.

Sales and prices in the West are quite weak, possibly because there are still a lot of houses priced well above even the raised limits for Fannie Mae and Freddie Mac.

In short, the housing sector is still a relative mess, but it is showing at least a hint of a possible recovery.

-- Jack Krupansky



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