Home Sale Data

One of the things holding back the housing recovery has been the build-up of inventory of homes on the market from the real estate crash of the prior decade. A healthy inventory of homes is typically about ninety days worth for stable home prices. Anything greater than that and the over-supply of homes will depress housing prices. Conversely any number lower than that will casuse prices to rise. Unoftunatley in most parts of the country we are no where near rising home prices.

Right now any positive news helps on invenotry numbers. Sales of new U.S. single family homes fell for the first time in three months in May, but inventories of new homes for sale reached record lows and the median sales price rose slightly, a government report showed on Thursday.

The Commerce Department said May new home sales fell 2.1 percent to a seasonally adjusted annual rate of 319,000. Analysts polled by Reuters were expecting a slightly slower pace of 310,000 for the month. May’s new home sales were 13.5 percent above the May 2010 level.

The Commerce Department report showed that the median new home sales price rose to $222,600 in May from $217,000 in April, marking the first increase since December last year.  U.S. housing starts rose more than expected and permits for future construction touched a five month high in May, a government report showed on Thursday.

The Commerce Department said housing starts rose 3.5 percent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April’s steep decline. April’s starts were revised up to a 541,000 unit pace, which was previously reported as a 523,000 unit rate.

At May’s sales pace, the supply of homes on the market dropped to 6.2 months’ worth, the lowest since April 2010

We still need to remeber though that there is a large “Shadow Inventory” of homes not included in these figures. “Shawdow Inventory” refers to homes that people have defaluted on but the banks have not yet put on the market.

My take we are still years away from a full-housing recovery.

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