Tuesday, June 23, 2009

Existing Home Sales, Median Prices Increase in May

WASHINGTON (Dow Jones) -- Existing-home sales improved again in May, but falling prices and bloated supply promise to make a housing sector recovery slow.

MP: That's one way to look at it. Here are some alternative views:

1. The April to May increases in median home prices (3.84%) and mean home prices (3.26%) were the largest monthly price increases in more than a year (data here).

2. The monthly May increase in both median home prices (3.84%) and homes sold (2.36%) was only the second time in at least a year that both prices and unit sales increased in the same month.

3. The back-to-back increase in home sales in both April and May is the first time in at least a year of two consecutive monthly increases.

4. The most recent two-month increase in sales of 4.84% is the largest since April 2004 (source).

5. The 9.6 months supply of inventory in May is below last year's May level of 10.9 months by more than five weeks, and is at the second-lowest level in the last year.


According to Brian Wesbury and Bob Stein:

The data today are consistent with our outlook that the economy is recovering from a panic. Home sales, building activity, and the rate of decline in home prices all seem to be bottoming or have already formed a bottom. In fact, the level of existing home sales in May was the highest since October 2008.

9 Comments:

At 6/23/2009 12:09 PM, Blogger 1 said...

Now this is interesting because there seems to be (operative word is 'seems') conflicting stories from Bloomberg News vs. that of the WSJ...

I found the following via John Lott's website:

From Bloomberg News: U.S. Home Prices Drop 6.8 Percent in April as Foreclosures Rise

(skip)

The housing slump has reduced the median price of an existing home 26 percent from the July 2006 peak, pushing affordability to near record levels. Prospective buyers are now being constrained by rising mortgage rates, the highest unemployment since 1983 and concern the housing rebound will be anemic.

While U.S. builders increased housing starts by 17 percent in May to an annual rate of 532,000, a May 26 report from S&P/Case-Shiller showed home prices in 20 U.S. metropolitan areas fell 18.7 percent in March from the same month last year.

(skip)

President Barack Obama has pledged to spend $275 billion to help keep as many as 9 million Americans in their homes. The government is also offering a tax break of as much as $8,000 for first-time homebuyers and incentives to lenders to modify delinquent home-loans.

Falling Behind

Those efforts may not be able to keep up with the rising number of Americans falling behind on their mortgages. U.S. foreclosure filings are forecast to hit a record 1.8 million in the first half of this year, according to RealtyTrac Inc., the Irvine, California-based seller of default data. Filings surpassed 300,000 for the third straight month in May, RealtyTrac said on June 11.

 
At 6/23/2009 1:00 PM, Anonymous Anonymous said...

Non seasonally adjusted existing home sales have declined every month in 2009 on a year over year basis. With the recent uptick in mortgage rates, it seems probable that the June sales data will make it 6 for 6.

Why anyone would use NAR stats to determine pricing is beyond me when far superior metrics such as Case Shiller or FHFA point in the other direction.

 
At 6/23/2009 3:15 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/23/2009 6:02 PM, Blogger BxCapricorn said...

Robert, your comment is worth a post somewhere in the blog-o-sphere. Great stuff.

 
At 6/23/2009 7:45 PM, Anonymous Anonymous said...

Not to worry, the same geniuses who got us into this mess are busy solving the problem as I write:

Two Democratic lawmakers are calling on Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.

WSJ

What could possibly go wrong?

 
At 6/23/2009 8:34 PM, Anonymous gettingrational said...

Folks, we are discussing a bottom not the fact that the housing situation is dismal. The NAR was not honest in their forecasts in 2008 and were rosy based on the hope for stable employment. That scenario did not happen (duh) but I think their statistics are true even if the forecasts are suspect.

My work as a property owner of
various multi-family buildings puts me in contact with many vendors. The mood is more upbeat and activity is growing from a stagnant situation this last winter.

@ Mr. Miller
What is the 51st state? I hope it is someplace with lots of oil and beautiful women. Let's start an exploration company and have a man-cession with these women as wildcatteres -- growl.

 
At 6/23/2009 10:06 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/24/2009 9:25 AM, Anonymous gettingrational said...

@ Mr. Miller

Thanks for the clarification on median house price (NAR) v. Case-Shiller Index. At least we can agree existing home sales are rising.

My location is the state of Washington and yes it is a more difficult. People comment to me all the time that business must be good because folks are moving out of homes. I tell them it is not true due to "doubling up" on mass scale.

 
At 6/30/2009 7:30 AM, Blogger Elli Davis said...

Here in Toronto, after horrifying 50% sales declines in December and January, the situation is completely optimistic, sales rising again after many months, so the average price...I believe RE crisis is over here!

 

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