New and Existing Home Sales Point To Contradictory Conclusions
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T'was the best of times, t'was the worst of times.
It all depends on who you ask and when you ask them.
Two more housing surveys were released this week with very contrary results
and it seems ever more clear that the housing market is either going to take
a long while to sort itself out and decide which way to head or it may just
see-saw or drift without ever resolving the question of the housing
bubble.
The National Association of Realtors issued their report on the sales of existing
homes for the month of April (the figures we reported last week were
for the first quarter of 2006) and they showed that sales were easing off after
two months of increases. But, a day earlier the Census Bureau in a joint release
with the Department of Housing and Urban Development, announced that, to the
surprise of almost everyone, new home sales had jumped nearly
5 percent above the March rate for total estimated annual sales of 1,198,000
units.
The NAR numbers which include sales of previously owned single family houses,
condos, townhouses, and co-ops slipped 2 percent from downwardly revised March
figures of 6.90 million to a seasonally adjusted annual level of 6.76 million
units. This was 5.7 percent below the pace of existing house sales in April
of 2005 on a seasonally adjusted basis and -10.1 percent unadjusted.
At present there is a six month inventory of houses available for sale at the
present consumption rate compared with 5.6 months of inventory indicated by
revised March figures. One year ago there was a 4.3 month backlog of houses
for sale.
In spite of slowing sales, median and average sales prices were both up over
March figures and year-over-year. The median price nationally was $223,000 in
April compared to 218,000 in March. This April figure was 4.2 percent higher
than the median of $214,000 one year ago. The Northeast showed the greatest
increase in the median price since last year, 5.6 percent.
The average price nationally was $269,000, $4,000 higher than
in March and 3.1 percent higher than last year. Average prices increased the
most in the West where prices were up 3.9 percent year over year.
Census Bureau/HUD information on new house sales painted a brighter picture.
Estimated new home sales for April totaled 1,198,000 (annualized) compared to
the 1,142,000 projected in March, an increase of 4.9 percent. In spite of this
good news, April 2006 sales are expected to be 5.7 percent lower than in April
of 2005.
At present there is an inventory of new homes which is expected to take 5.2
months to sell at the current rate compared to a five month supply in March
and a six month inventory in February. One year ago there was a 3.8 month supply
of new homes on the market. Houses that sold this April had been on the market
for a median period of 4.0 months compared to 3.9 months in March and 4.4 months
one year ago.
The median price of a new home in April was $238,500, an increase of $6,500
since last month and the average price was $298,300, up from $291,200. Both
median and averages prices fell significantly from February to March so it is
hard to draw any conclusions about trends from the current figures.
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