ARLINGTON, Va. -- NAFCU Macro Flash Data reports for both existing and new home sales show results from the month of October underperforming relative to expectations but portray a mixed bag with existing sales down by 1.2% (annualized) and new home sales up by 1.7%.
This is the slowest period for existing home sales since 1999, as year-over-year, sales have dropped 20.7%, according to the report. The same is true for median home prices, which declined 5.1% to $207,800 (non-seasonally adjusted). Similarly, the inventory of homes available for sale increased from 10.4 months supply to 10.8 months for the month, well above the usual six-month supply, said NAFCU. This eighth month decline reinforces the notion of economists that the housing market will be depressed for many months to come.
Results for new home sales were more robust in the Northeast at 1.8% and the South at 6.8% with the biggest surge coming in the Midwest at 14.2%. Sales were down 23.5% from a year ago, having been revised downward to 716,000 units, the slowest sales pace since 1996.
Homebuilders are giving "significant discounts" on home prices in order to relieve existing inventory. NAFCU found that slowing job growth, low consumer confidence, rising energy prices and the prospect of a significant slowdown in the economy are putting a strain on demand. Conditions are not predicted to stabilize until well into 2008.