August Existing Home Sales, reflective of contracts signed 1-3 months prior, totaled 4.82mm annualized, well above expectations of 4.56mm and up from 4.47mm in July. It’s the most since Nov ’09 when it last was above 5mm. Sales for both single family and condos/co-ops were up and months supply fell to 6.1 from 6.4, the lowest since Jan. Distressed properties made up 22% of sales vs 24% in July and 31% in Aug ’11. All cash buyers (mostly investors) totaled 27%, the same as in July but down from 29% in Aug ’11. Sales rose in each region of the country where “inventories are broadly balanced…however, the West and Florida markets are experiencing inventory shortages.” The median home price was little changed sequentially at $187,400 but that is up 9.5% y/o/y with the average price up 7.2% y/o/y. Bottom line, housing continues to recover but the bounce still has to be put into the perspective of how much damage was done. Looking specifically at single family homes, at a sales level of 4.30mm, it’s back to where it was in 1998 and of course still well below the bubble high of 6.34mm in Sept ’05.

Starts Light
Housing Starts in August totaled 750k annualized, 17k less than expected and July was revised down by 13k. The breakdown was mixed. Single family starts rose by 28k to 535k, the most since Apr ’10 when the industry was artificially goosed by the home buyers tax credit. Multi family starts were down by 11k. Permits totaled 803k vs 811k in July, 7k above estimates with single family up by 1k m/o/m and multi family down by 9k. Bottom line, while multi family starts and permits fell somewhat from July, the secular wind is at its back. With respect to single family, although starts improved to 2 yr highs, at 535k, it is still 71% below its bubble high in Jan ’06 so the recent recovery, while certainly welcome, comes in that context.

Category: MacroNotes, Real Estate, Think Tank

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