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Sales of new
single-family homes fell by 31,000 units (7.0 percent) to 414,000 (SAAR ) in December. This was well off (-13.4 percent)
October’s peak rate of 463,000 units. Despite the retreat, however, sales were
4.5 percent above year-earlier levels; in fact, 2013 was the best year for
sales since 2008. Meanwhile, the median price of new homes sold nudged higher (by
$1,700 or 0.6 percent) to $270,200. Although the drop in starts outpaced the
drop in sales during December, the three-month average starts-to-sales ratio bumped
up to 1.51 (from 1.45). Click here
for our post on December housing permits, starts and completions.
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Single-unit
completions fell faster (-49,000 units or 8.2 percent) than sales (-31,000
units or 7.0 percent) in December. Consequently, new-home inventory dropped in
absolute terms by 5,000 units but rose by 0.3 month in months-of-inventory
terms.
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Existing home sales
reversed a three-month slide in December, rising by 50,000 units (1.0 percent) to
4.87 million units (SAAR ); as a result, the
share of total sales comprised of new homes nudged down to 7.8 percent. The
median price of previously owned homes sold in December also advanced (by $2,500
or 1.3 percent), to $198,000.
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Housing
affordability improved marginally in November because the median price of
existing homes for sale fell for a
fifth month in November (by another $1,400) to $198,000; the National
Association of Realtors’ prices of existing homes for sale were $18,400 (8.6
percent) off their June 2013 high. 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 decreases of less than 0.1
percent in November (13.6 percent relative to a year earlier). While the
year-over-year appreciation rate was the fastest since February 2006, the combination
of a lower median home price and falling gains in the monthly home price index
suggest home prices may be at a crossroad.
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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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