Amazing: Existing Home Sales Finally Beat Expecations
Wow, for once sales of existing homes in America beat the Street and increased 7.7%. Its not moving the market today and the crappy news is that the median price of a previously owned home dropped 5.1% to $168,300 from $177,300 in August 2010.
However any positive is a huge win for our depressing housing sector, we'll take whatever we can get.
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The 411 via Bloomberg.com -- Sales of previously owned U.S. homes rose more than anticipated in August as investors scooped up distressed properties with cash.
The 7.7 percent increase left purchases at a five-month high 5.03 million annual rate, the National Association of Realtors said today in Washington. The August pace compares with a peak of 7.08 million in 2005, before the housing boom turned into a subprime-mortgage bust that dragged the economy into an 18-month recession.
“Housing’s been down for so long, we should take whatever good news we can get,” said Brian Jones, an economist at Societe Generale in New York, whose forecast was among the highest in the Bloomberg survey. “Interest rates are low and pricing is attractive and people are responding.”
While foreclosure-driven price declines and record-low mortgage rates are preventing a renewed slump in sales, companies like Lennar Corp. (LEN) say weaker confidence and limited access to financing are limiting demand. As the Federal Reserve meets today to consider ways to bolster the economy, cheaper borrowing costs are doing little to spur housing, which since 1982 has fueled every recovery except the current one.
The median forecast of economists surveyed by Bloomberg News called for a 4.75 million rate. Forecasts in the survey of 74 economists ranged from 4.5 million to 4.99 million.
Stocks fell, sending the Standard & Poor’s 500 Index down for a third day, as investors awaited a Fed announcement that may signal more stimulus for the recovery. The S&P 500 dropped 0.5 percent to 1,196.18 at 11:05 a.m. in New York. Treasuries rose, pushing down the yield on the benchmark 10-year note to 1.92 percent from 1.94 percent late yesterday.
Median Price Falls
The median price of a previously owned home dropped 5.1 percent to $168,300 from $177,300 in August 2010, today’s report showed.
Existing-home sales, tabulated when a contract closes, rose 19 percent from the same month last year.
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