EconoMonitor

Existing Home Sales Add to the Parade of Bullish Data

Data on existing home sales were significantly above expectations with a seasonally-adjusted annual rate of 5.24 million sales registered according to the National Association of Realtors (NAR).  The NAR released a statementt.gif on the figures, an excerpt of which is below.

For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.

Existing-home salest.gif – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.  The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.

Lawrence Yunt.gif, NAR chief economist, said he is encouraged.  “The housing market has decisively turned for the better.  A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said. 

The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.

The increase in existing home sales may be underpinned by a heavy inventory of forced and foreclosure sales, but a sale is a sale.  I see this as a bullish data point which will further the view that the economy has rebounded or will soon do so.


Originally published at Credit Writedowns and reproduced here with the author’s permission.

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Richard has published papers on wages policy, the taxation of financial arrangements and macroeconomic issues in Pacific island countries. Views expressed in these articles are his own and may not be shared by his employing agency. He is the author of How to Solve the European Economic Crisis: Challenging orthodoxy and creating new policy paradigms