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Sales of new
single-family homes rose by 90,000 units (25.4 percent) to 444,000 (SAAR ) in October. Meanwhile, the median price of new
homes sold dropped by $11,600 (4.5 percent) to $245,800; prices are $33,500 (12.0
percent) below their April peak. Because of Census Bureau reporting delays, the
graph above contains data through August. The revised data show the three-month
average starts-to-sales ratio increased to 1.52 in August -- near the top end
of the historical range.
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Data
for single-unit completions is also delayed until mid-December, so the graph
above shows results through August. Because sales rocketed higher in October,
new-home inventory retreated by 1.5 months-of-sales (to 4.9 months) despite the
absolute number of homes shrinking by only 7,000 units.
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Existing home sales
decreased at a faster pace (-170,000 units or 3.2 percent) to 5.12 million units
(SAAR ) in October; as a result, the share of
total sales comprised of new homes jumped up to 8.0 percent. The median price
of previously owned homes sold in October edged higher (by $1,000 or 0.5
percent), to $199,500.
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Although
the median price of existing homes for
sale continued to retreat in September (by $10,400 or 5.0 percent), housing
affordability has not experienced a commensurate rebound. Concurrently, Standard & Poor’s
reported that both the 10- and 20-City Composites in the S&P/Case-Shiller Home
Price indices posted not-seasonally adjusted monthly gains of 0.7 percent in September
(13.3 percent relative to a year earlier). This small month-over-month gain
(the smallest since February) suggests that price momentum is 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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