Existing home sales drifted down to a 6220k annual rate from a revised 6270k rate in November (prev 6280k). The result compared to expectations to a 6250k rate.
The interesting news is that supply fell to a six-month low of 6.8 mos supply from 7.3 mos in November. There were 3.51 mln homes available for sale at the end of December. Prices rose unexpectedly. The median home price was $222,000 in December, compared with a revised $217,000 in November and an unrevised $222,000 in December 2005. The average price rose to $269,000 from $265,000 and was also above its year-ago level of $268,000.
Sales for all of 2006 dropped by 8.4% to 6480k from a record 7080k in 2005. The annual drop was the sharpest since 17.7% in 1982 but 2006 marked the third strongest year on record for existing home sales.
Sales fell 2.8% in the Northeast to a 1040k rate, rose 4.3% in the Midwest to a 1470k rate and were up 0.8% in the South at 2490k. Sales pulled back by 9.1% to a 1200k rate in the West. Sales in the prior two months had been quite strong.
In December single family home sales fell 1.3% to a 5440k annual rate while condo sales fell 1.8% to a 746k rate. Prices were up slightly for condos but unchanged for single-family homes.
The data reflects contracts that were signed a month or two prior so weather can't be flagged as a supporting factor. Looking ahead sales may drift closer to the 6200k mark in the first quarter. However, the supply overhang is less of an issue in the resale market than first thought. It continues to be an issue for home builders though with companies flagging excess inventories and cancellations as impacting earnings.
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