Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Existing home sales declined 1.7% in September to an annual rate of 4.75 million units
Posted Under: Home Sales • Housing
Supporting Image for Blog Post

 
Implications: Although existing home sales fell slightly in September, they remain right near the highest level in over two years and there should be no doubt the housing market is in recovery. Sales are up 11% from a year ago while home prices are up 11.3%.  Meanwhile, the inventory of existing homes fell to 2.32 million in September from 2.40 million in August, the lowest level since March 2005! Inventories are down 20% from a year ago and the months' supply of homes (how long it would take to sell the entire inventory at the current selling rate) fell to 5.9, the lowest level since March 2006. Just a year ago, the months' supply was 8.1. In the year ahead, higher prices and sales volumes should lure more potential sellers into the market. The rise in median prices can be attributed to a couple of factors. First, a lack of inventory while demand is picking up.  Second, fewer distressed sales and more sales of larger homes.  In general, it still remains tougher than normal to buy a home.  Despite record low mortgage rates, home buyers face very tight credit conditions.  Tight credit conditions would also explain why all-cash transactions accounted for 28 percent of purchases in September versus a traditional share of about 10 percent.  Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it's a great time to buy.  With credit conditions remaining tight, we don't expect a huge increase in home sales anytime soon, but the housing market is definitely on the mend.  In other recent news, new claims for unemployment insurance increased 46,000 last week to 388,000.  The week before, claims had dropped to 342,000.  The true trend is likely somewhere in between; averaging the two figures gets to 365,000 which is very close to the four-week moving average of 366,000.  The Philadelphia Fed index, which measures manufacturing sentiment in that region, increased to +5.7 in October from -1.9 in September.  This is the first positive reading and the highest level since April.

Click here for a PDF version.
Posted on Friday, October 19, 2012 @ 11:33 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Home Building Soared in September, up 15% to 872K Units at an Annual Rate
No Recession Yet
Industrial Production Rose 0.4% in September, Capacity Utilization Moved Up to 78.3%
The Consumer Price Index (CPI) was Up 0.6% in September
The Romney Tax Plan
Retail Sales Increased 1.1% in September, Beating the Consensus Expected Gain of 0.8%
The Producer Price Index (PPI) Increased 1.1% in September
The Trade Deficit in Goods and Services Came in at $44.2 Billion in August
It's the Spending, Stupid
Thelma, Louise and the Fiscal Cliff
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.