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Wednesday, December 4, 2013

October 2013 U.S. Home Sales, Inventories and Prices

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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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