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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Wednesday, September 25, 2013

August 2013 U.S. Home Sales, Inventory and Prices

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Sales of new single-family homes rose by 31,000 units (7.9 percent) to 421,000 (SAAR). Meanwhile, the median price of new homes sold dropped by another $1,700 (0.7 percent) to $254,600; prices are $24,700 (8.8 percent) below their April peak. With starts rising faster than sales, the three-month average starts-to-sales ratio increased to 1.44 in August. Click here for our post on August housing permits, starts and completions. 
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Single-unit completions edged up by 3,000 units (0.5 percent). Because sales picked up in August, new-home inventory retreated by 0.1 month-of-sales even while the absolute number of homes rose by 5,000 units. 
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Existing home sales increased at a slower pace (90,000 units or 1.7 percent) to 5.48 million units (SAAR) in August; as a result, the share of total sales comprised of new homes nudged up to 7.1 percent. The median price of previously owned homes sold in August edged lower (by $300 or 0.1 percent), to $212,100. 
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Although the median price of existing homes for sale was virtually unchanged in July (just $600 lower than in June), housing affordability continued to erode because of rising mortgage interest rates. Concurrently, Standard & Poor’s reported that the 10- and 20-City Composites in the S&P/Case-Shiller Home Price indices posted not-seasonally adjusted monthly gains of, respectively, 1.9 and 1.8 percent in July (12.3 and 12.4 percent, respectively, relative to a year earlier). The seasonally adjusted 20-City Composite increased by just 0.6 percent (relative to June), well below expectations of +0.8 percent. This was the third consecutive monthly miss to expectations, and suggests that price momentum may be starting to fade. 
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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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