Existing Home Sales Rise 5.6%; Sales Prices Up 0.1%

In November, existing home sales rose by 5.6 percent to an annualized sales pace of 4.68 million units. The increase in sales more than reverses the 2.2% decline seen in October. Sales have generally trended upward since the large fall-off in the early summer following the expiration of the home buyer tax credit. However, sales still remains below the per-tax credit pace. From a year prior, sales were down 27.9%. This number is magnified due to a sales jump in November 2009 due to the first planned expiration of the tax credit.

With the increase in sales over the month, the months supply of inventory fell to 9.5 from 10.5. This was the lowest the ratio has been since June. Still, the ratio is quite high. Long term, the historical normal is around 5 months of inventory. Ratios above about 6 to 7 months are historically correlated with short term price declines. The median price in November, snapped a four month streak of price declines. The median price rose 0.1 percent to $170,6000/ From a year prior, prices were up 0.4%, the first positive year-over-year change since August.

	Nov	Oct	Sep	Aug	Jul	Jun
Sales (mil. annual.)	4.68	4.43	4.53	4.12	3.84	5.26
M/M % Change	5.6	-2.2	10.0	7.3	-27.0	-7.1
Med. Price (‘000s)	$170.6	$170.4	$171.5	$177.5	$182.1	$183.0
Y/Y % Change	0.4	-0.9	-2.5	0.2	0.4	0.7
Months Supply	9.5	10.5	10.6	12.0	12.5	8.9