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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, January 1, 2014

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

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Sales of new single-family homes fell by 10,000 units (2.1 percent) to 464,000 (SAAR) in November. October’s 474,000 units was the fastest sales rate since July 2008. Meanwhile, the median price of new homes sold jumped by $11,700 (4.5 percent) to $270,900; prices are $8,400 (3.0 percent) below their April peak. Despite starts significantly outpacing sales in November, the three-month average starts-to-sales ratio ticked lower (to 1.43). Click here for our post on November housing permits, starts and completions.
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Although single-unit completions fell faster (-20,000 units or 3.3 percent) than sales (-10,000 units or 2.1 percent) in November, new-home inventory retreated by 0.2 month-of-sales while the absolute number of homes for sale dropped by 12,000 units.
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Existing home sales slid lower for a third month, dropping by 220,000 units (4.3 percent) to 4.9 million units (SAAR) in November; as a result, the share of total sales comprised of new homes nudged up to 8.7 percent  the largest proportion of sales since August 2009. The median price of previously owned homes sold in November edged lower (by $1,200 or 0.6 percent), to $196,300.
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Although the median price of existing homes for sale ticked higher in October ($1,000 higher than in September), housing affordability was not adversely affected. 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 0.2 percent in October (13.6 percent relative to a year earlier). While the year-over-year appreciation rate was the fastest since February 2006, the monthly gain was the slowest since February 2013. The combination of a lower median home price and slowing gains in the monthly home price index suggests the housing market is more fragile than is commonly understood.
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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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