Good News: Home Inventories Are Falling
HOUSING WIRE--In perhaps a bit of good news, sales of existing homes increased in February, trumping most analysts’ forecasts. The National Association of Realtors reported today that existing home sales surprisingly rose 2.9% to a seasonally-adjusted 5.03 million unit rate last month, up from a 4.89 pace in January — soundly beating some pretty glum analyst forecasts.
Total housing inventory fell 3.0% at the end of February to 4.03 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.2-month supply in January. Most housing experts look at inventory in assessing the overall health of the housing market, particularly in times of market stress.
According to Brian Wesbury and Bob Stein at First Trust Portfolios, "The best news in today’s report is that the inventory of existing homes is declining."
Comment: After rising for nine consecutive months in 2007, the important variable "months supply of houses at the current sales rate" has declined in three out of the last four months (see chart above), suggesting an improvement in the balance between homes available for sale and buyers in the market for homes.
8 Comments:
Don't be fooled. The glut of unsold houses on the market is just the tip of the iceberg.
There is almost an endless supply of houses just waiting to be foreclosed on.
2011 is the soonest you are going to see this ship turn. Until then ignore the people that are saying they see signs of improvement. They just like hearing their own voices.
The Masked Millionaire
www.TheMaskedMillionaire.com
Too bad home prices fell by 8.7% year over year, the largest yearly decline in 4 decades. Another 2 years of price declines at the same rate and the market will be back to equilibrium of 4-5 months supply and 3.5 times median income.
"There is almost an endless supply of houses just waiting to be foreclosed on"...
Interesting...
I wonder how many of those houses you talk about were owned by people hoping to flip them in a hurry?
"Too bad home prices fell by 8.7% year over year, the largest yearly decline in 4 decades"...
Two to three years ago housing prices were going nutz...
I'm wondering if those prices skyrocketed by the largest percentage in four decades?
Or it could be:
1. A normal winter and pre-spring decline in houses for sale, plus;
2. Seller fatigue, and;
3. Buyers sitting on the fence and waiting for prices to fall more.
More lipstick on Bear Stearns' pig
Commentary: Fed has gone into partnership with J.P. Morgan
The Bush administration has been downplaying its role in the bailout by stressing that the funds come from the Fed. But Ely said there is no functional difference: It is being made on behalf of the U.S. government. "Whether it is the Fed or the Treasury, it is the right hand or the left hand," Ely said.
Treasury may be constrained by statute from making the loan, Ely said, but there are also political advantages because President Bush has pledged that there will be no government bailouts in the financial and housing market turmoil.
"I think Treasury would prefer that it be done through the Fed so it had the look of a little more political independence and hands-offness," Ely said.
White House spokesman Dan Perino again skirted the issue when asked about the new agreement at Monday's briefing.
"This is a deal between Bear Stearns and J.P. Morgan; the Fed is involved...and part of the Fed's commitment to the country, and their mission, is to make sure that the taxpayers are protected, and that is particularly true in this regard, as well," Perino said.
But members of Congress see right through this façade, Ely said. "They will be all over this thing. There are lots of grandstanding opportunities."
http://www.marketwatch.com/news/story/story.aspx?guid=%7bA44AC566-7108-4797-BE94-74489B3A3A4B%7d&siteid=bondheads
The taxpayers are going to eat this thing along with the mortgage mess caused by these clowns. Anything goes in an election year.
I'm wondering if those prices skyrocketed by the largest percentage in four decades?
Duh, have you being hiding under a rock?
You believe NAR? They put lipstick and a wig on all their housing numbers. Boost the morale for their due paying agents and convince the home buyer that right now is the time to buy. Yeah right...
You believe NAR?
Sure, why not? Inventory is not seasonally adjusted. Anyone with a high school education looking at the data knows that there is seasonality to sales (demand), for sales (supply) and price.
In any event, another data point on prices; another dagger to personal consumption expenditures going forward.
Sometimes I wonder about cognitive dissonance college education perfessers at Michigan. :-)
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