Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Existing Home Sales Declined 3.7% in February

 

Implications:  After starting the year at their fastest pace since 2007, existing home sales took a breather in February.  Sales of previously-owned homes fell 3.7% in February to a 5.48 million annual rate, but are still up 5.4% from a year ago.  It is important to remember home sales are volatile from month to month and we expect the general upward trend of the past several years to keep going.  That being said, tight supply and rising prices remain headwinds.  In fact, inventories have now fallen on a year-over-year basis for 21 consecutive months.  The months' supply of existing homes – how long it would take to sell the current inventory at the most recent sales pace – was only 3.8 months in February.  According to the NAR, anything less than 5.0 months is considered tight supply.  The good news is that demand for existing homes was so strong that 42% of properties in February sold in less than a month, pointing to eagerness from buyers.  Higher demand has also driven up median prices, which have now risen for 60 consecutive months on a year-over-year basis. While this may temporarily price some lower-end buyers out of the market, it should ultimately help alleviate some of the supply constraints as "on the fence" sellers take advantage of higher prices and trade-up or trade-down to a new home.  Although some analysts may be concerned about the impact of higher mortgage rates, it's important to recognize that rates are still low by historical standards, incomes are growing, and the appetite for homeownership is eventually going to move higher again.  In other housing news this morning, the FHFA Index, which measures prices for homes financed with conforming mortgages, remained unchanged in January and is now up 5.7% from a year ago. In the year ending in January 2016, FHFA prices were up 6.2%.

Click here for PDF version

Posted on Wednesday, March 22, 2017 @ 11:21 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.