What I Saw Last Week
U.S. Existing Home Sales rose 1.2% in February to 4.88M from an unrevised 4.82M in January. I was expecting the annual rate to rise to 4.90M.
I believe that inclement winter weather conditions may have played a small part in the softer-than-expected existing home sales level as sales in the Northeast dropped 6.5% and sales in the Midwest were flat. The winter weather, however, was not the reason why overall sales trends remain weak and below 5.0M.
As can be seen in the inventory chart above, supply problems continue to keep downward pressure on home sales. Inventories remained at a 4.6 months’ supply at the current sales rate for a second consecutive month. During normal periods of buying and selling, inventories are generally maintained at 6.0 months’ supply.
The lack of inventory is also functioning to push up prices. The median existing home price increased…
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