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Tuesday, March 25, 2014

February 2014 U.S. Home Sales, Inventory and Prices

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Sales of new single-family homes fell by a seasonally adjusted and annualized rate (SAAR) of 15,000 units (3.3 percent) to 440,000 in February. Sales were 2.3 percent below year-earlier levels. Meanwhile, the median price of new homes sold rose (by $1,000 or 0.4 percent) to $261,800. Although starts increased while sales decreased during February, the three-month average starts-to-sales ratio dropped to 1.37 (from 1.46). Click here for our post on February housing permits, starts and completions.
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Single-unit completions rose (+24,000 units or 4.0 percent) while sales fell (-15,000 units or 3.3 percent) in February. Even so, new-home inventory barely budged in absolute terms but expanded by 0.2 month in months-of-inventory terms. 
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Existing home sales inched lower in February, falling by 20,000 units (-0.4 percent) to 4.60 million units (SAAR) -- the slowest rate since July 2012. Once again, the National Association of Realtors used a scatter-shot approach to assigning blame for the subdued activity, but remained hopeful for future improvement. The share of total sales comprised of new homes retreated below 9 percent. The median price of previously owned homes sold in February advanced (by $1,100 or 0.6 percent), to $189,000.
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Housing affordability improved slightly in January because the median price of existing homes for sale resumed its downward trend by falling $8,800 to $188,900. 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 changes of 0.1 percent or less in January (respectively, +13.5 and +13.2 percent relative to a year earlier).
“The housing recovery may have taken a breather due to the cold weather,” observed David Blitzer, Chair of the Index Committee at S&P Dow Jones Indices. “Twelve cities reported declining prices in January vs. December; eight of those were worse than the month before. From the bottom in 2012, prices are up 23 percent and the housing market is showing signs of moving forward with more normal price increases.
“Expectations and recent data point to continued home price gains for 2014,” Blitzer continued, showing a bit more optimism than last month. “Although most analysts do not expect the same rapid increases we saw last year, the consensus is for moderating gains.” 
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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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