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ECON: Existing Home Sales Weaker Than Expected, Inventories Shrink
Posted to: Micro News
Tuesday, January 22, 2013 10:11 AM
- Existing Sales 4.94 Mln annual rate vs 5.1 consensus
- Down 1 pct vs +4.8 pct consensus
- Inventory Lowest since Jan 2001 in terms of units
- Inventory Lowest Since 2005 in terms of Months of Supply
- 24 pct distressed vs 22 pct in November.
Market Reaction: best volume pop of the domestic session, and thus far, a positive one for MBS and Treasuries. S&P's pulled back 3 points from their morning rally. 10yr yields fell about 1 bp, and MBS added 1-2 ticks. That move appears to be at least pausing for consideration now.
Lawrence Yun , NAR chief economist, said pent-up demand is sustaining the market. "Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," he said. "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices. Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013."
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