Sales Of Existing Homes Drop Unexpectedly In December To Lowest Supply Level In Over A Decade

Wednesday, January 23, 2013 08:09
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Sales Of Existing Homes Drop Unexpectedly In December To Lowest Supply Level In Over A Decade

Tags: economic indicators | Economic Outlook | economy

One aspect of the star of the economic recovery, housing, took a breather in December as sales of existing homes fell 1% to a 4.94 million annual rate while supplies of existing homes shrank.
 
The data points to the hurdles the housing market still has to surmount even in its best year since 2007.

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Analysts say the small dip takes nothing away from the momentum gained in the housing market through last year, even though the number of exisiting homes for sale is the lowest since January of 2001.
 
The drop indicates that it may be as much of a seller’s market as it is a buyer’s market. Supplies have dwindled unusually for this time of year and low interest rates have increased demand, shrinking supplies of homes available for purchase and pushing prices higher.
 
At the current pace, it would take 4.4 months to sell all houses currently on the market. That compares to 4.8 million homes available in November.
 
In another report, this one from the Federal Reserve Bank of Richmond, the manufacturing index fell to minus 12 since July when the reading was 5. Negative readings indicate contraction.
 
German investor confidence reached its highest level in 2 ½ years, indicating its economy may regain its momentum after contracting in the fourth quarter of 2012.

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