Monday, June 25, 2007

Existing Home Sales Better-Than-Expected

- Existing Home Sales for May fell to 5.99M versus estimates of 5.97M and an upwardly revised 6.01M in April.

BOTTOM LINE: Sales of previously owned homes in the US fell less-than-expected in May and April sales were revised slightly higher, Bloomberg reported. The supply of existing homes at the current sales pace rose to 8.9 months’ worth versus 8.4 months’ worth at the end of the prior month. The median price of an existing home fell slightly to $223,700. Sales of condos and co-ops rose 2.6%. Overall, purchases fell 3.4% in the South and .8% in the West. Sales rose 5.8% in the Northeast and .7% in the Midwest. The Fed’s Bernanke recently reiterated his view that the US economy was poised for a moderate rate of growth despite ongoing softness in housing. I continue to believe home sales are stabilizing at relatively high levels by historic standards. However, construction activity will continue to remain muted as homebuilders work down inventories.

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