February Existing Home Sales

Housing Data Cornerstones

February Existing Home Sales

• FEBRUARY EXISTING HOME SALES (SAAR) BASICALLY UNCHANGED.

February existing home sales (SAAR) totaled 5.02MM units, 0.6% lower than

January's 5.05MM unit pace, but 7.0% higher than year-ago levels. Consensus

expectations were for 5.00MM units. Single-family seasonally adjusted sales

were 4.37MM units, down 1.4% sequentially, but 4.3% higher yr/yr. Singlefamily

SAAR sales were mixed, sequentially declining 2.4% and 5.2% in the

South and West, but increasing 1.7% and 3.1% in the Northeast and Midwest,

respectively. The single-family median home price of $164,300 was up

sequentially at 0.3% but lower yr/yr (-2.1%).

• INVENTORY JUMPS. Existing housing units available for sale in January

totaled 3.59MM units, up 9.5% over January's 3.28MM, but down 5.5% yr/yr.

Single-family inventory of 2.99MM also increased sequentially by 6.4% but

remains lower yr/yr by 6.6%. Single-family months' supply rose 7.9%

sequentially to 8.2 months. Total months' supply (which includes condos) also

rose versus last month, to 8.6 months (+8.3%). We note that (1) gross inventory

data is not seasonally adjusted, and typically rises in spring; and (2) realtors

typically consider a six-month level ''balanced" with demand.

• EXISTING HOME SALES ARE TYPICALLY A LAGGING INDICATOR OF NEW

HOME FIELD CONDITIONS. Existing home sales are transactions that have

closed in the month recorded, but have normally been in escrow anywhere from

30-90 days prior.

• TAKEAWAY. After the federal tax credit extension was announced in early

November, signs of a substantial resurgence in sales rates similar to 2009 have

not materialized clearly. Both January existing and new home sales missed

expectations (January seasonally adjusted new home sales fell to the their lowest

level since the Census began reporting the data in 1963). While weather likely

played a role in both datasets, February's modest results still do not appear to

reflect a kick-up in demand levels. We note however, that meaningful increases

in sales rates were not seen in the dataset over the tax credit's first expiration

deadline (November 30) until September, so perhaps the last-minute move is

still to come. Also note that because this credit's expiration is an April 30

order/June 30 close, we might see an increase in urgency measured by pending

home sales in March and April, followed by a more powerful increase in existing

home sales in May and June.