October Existing Home Sales
Updated 30-Nov-08 19:53 ET
Highlights
- October existing home sales fell, but the 4.98 million level is not all that bad. It is above the June and August rates.
- Foreclosures are boosting sales in some areas, but that reflects demand and should not be discounted. The lower prices associated with foreclosures are driving some sales, and it is the price factor that is important - but the demand still counts.
- Existing home sales may well hold steady in the months ahead even while new home sales fall further. Existing home sales purchasers include more credit-strong borrowers than new home purchasers, and the trend so far this year has been remarkably good. Prices are unlikely to rise any time soon, however.
Key Factors
Big Picture
- Demand for existing homes had bottomed through 2008. This was not widely recognized, but home sales were averaging above the rate of late 2007. In September, existing home sales bot a bump from foreclosure sales. These can not be discounted, because it is not important where the supply is derived. The demand is still there. It is the lower price associated with the foreclosure sales that is important. For the remainder of 2008, and into 2009, the outlook for home sales will depend partly on government action to prevent foreclosures and to stimulate housing demand. Apart from this, demand is likely weakening because of the sour national economic mood, but demand would probably not have been as weak as generally perceived.
| Category |
Oct |
Sep |
Aug |
Jul |
Jun |
| Existing Home Sales |
4.98M |
5.14 |
4.91 |
5.02 |
4.85 |
| Months Supply |
10.2 mo |
10.0 |
10.6 |
10.9 |
11.1 |
| Median Price Y/Y |
-11.3% |
-9.0 |
-9.5 |
-7.1 |
-6.1 |
