Existing U.S. Home Sales Rose in November to 6.54 Million Pace

[FBaggins]

Source: Bloomberg

Dec. 22 (Bloomberg) -- Sales of existing U.S. homes rose more than forecast in November, to the highest level in more than two years, a sign housing is gaining strength along with the broader economy entering 2010.

Purchases increased 7.4 percent to a 6.54 million annual rate, the highest since February 2007, from a revised 6.09 million pace the prior month, the National Association of Realtors said today in Washington. The median sales price declined 4.3 percent from the same month a year earlier, the smallest decrease since November 2007.

Lower interest rates, cheaper homes and a homebuyer tax credit have resuscitated a housing market that contributed to the worst economic slump since the 1930s. A sustained recovery in housing and the economy depends on regenerating the 7.2 million jobs lost in the last two years.

“Housing is in recovery mode,” Aaron Smith, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The combination of the homebuyers’ tax credit, good affordability and looser credit conditions going forward will continue moderate gains in housing.”



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aag8dx.36lBQ&pos=1

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Good news obviously...

...but one must wonder what happens when government incentives go away.

We may find that all this did was accelerate sales that would have happened a few months later anyway... and not actually increased demand.

[rfranklin]

1. As long as your are paying people to buy houses this is B.S....

Where are the jobs? These are existing homes which means no construction jobs, no manufacturing jobs. This might benefit Home Depot.

[thecrow]

2. How many of these are homes that were foreclosed on

because people are out of work??

[girl gone mad]

3. Calculated Risk always has excellent reporting on this.

http://www.calculatedriskblog.com/2009/12/more-on-existing-home-sales.html

Earlier the NAR released the existing home sales data for November; here are a couple more graphs ... and a few comments.

This graph shows NSA monthly existing home sales for 2005 through 2009 (see Red columns for 2009).



Sales (NSA) in November were much higher than in November 2007 and 2008, and were at the same level as November 2006.

Of course - as I noted earlier - many of these transactions in November were due to first-time homebuyers rushing to beat the expiration of the tax credit (that has now been extended).

Note: Existing home sales play an important role in the economy because they allow people to move for new job opportunies, or to move to larger or smaller homes for various reasons. It is the reason that people move that contributes to the economy; churning homes does nothing except generate some fees and commissions. Nothing has been added to the housing stock or the wealth of the nation.

The way to think of existing home sales is as grease for the economy. Once you have enough - probably around 4.5 to 5.0 million units per year - any extra is just a waste.

What matters for the economy are new home sales, housing starts and residential investment. And there has been little improvement in these key indicators - and there will not be any until the huge overhang of excess inventory is reduced.

This really shows up on the following graph:



http://www.calculatedriskblog.com/2009/12/more-on-existing-home-sales.html">more...

[dysfunctional press]

4. how many of these houses are being sold to the people who will be living in them?

or have the moneyed investors started scooping them up to rent them out...?

when it comes to economic statistics, there's generally more to a number than just the number.

[Po_d Mainiac]

5. BofA is supposedly going to dump something like 5X the total

foreclosures of 2009 on the market next year....Looking for the link

If that happens, even with the 10%/8K credit, most of the mortgages written in the last two months will be in dire need of a snorkel.

You can only kick the can so far.