US housing slowdown continues
US housing slowdown continues
By Daniel Pimlott and Michael Mackenzie in New York
Copyright The Financial Times Limited 2006
Published: September 25 2006 16:05 | Last updated: September 25 2006 16:05
Prices of existing homes fell for the first time in 11 years and the backlog of available homes for sale was at its highest since current measures began, underlining the significant slowdown in the housing market.
Existing-home sales slipped 0.5 per cent to an annual rate of 6.30m units in August from a level of 6.33m July, according to the National Association of Realtors. They were 12.6 per cent down on the year before
Economists had expected a fall in sales to 6.2m, following a sharp 4.1 per cent decline in sales in July.
“The housing market continues to weaken, but the deterioration in this report was relatively modest,” said John Ryding, economist at Bear Stearns.
The Federal Reserve has recently justified its pause in interest rate rises by saying that weakness in the housing sector will put the brakes on growth and help slow down inflation. The latest numbers suggest that the central bank may soon start lowering rates.
‘’Housing is in trouble, the economy is a lot weaker than people think and the Fed will ease policy much faster than what is currently priced by markets,’’ said Michael Kastner, head of fixed income at SterlingStamos.
The housing data pulled the yield on the two-year Treasury note down to about 4.65 per cent, its lowest level since March.
David Lereah, the NAR’s chief economist, said home sales appeared to be levelling out after a sharp drop in July. “After a stronger-than-expected drop in July, the fairly even sales numbers in August tell us the market is at a more sustainable pace,” he said.
The decline follows weak data on housing starts and building permits in August.
The median existing home price was $225,000 in August, down 1.7 per cent from a year earlier - the first price fall since 1995 and the second biggest decline on record . “This is the price correction we’ve been expecting – with sales stabilising, we should go back to positive price growth early next year,” Mr Lereah said.
Housing inventory levels rose 1.5 per cent to a 7.5 month supply at the current sales pace, compared with 6.3 months in July, and 4.7 months at this time last year. The inventory was at its highest since since condominiums were added to the survey in 1999.
Existing home sales account for about 85 per cent of the housing market. They have fallen every month since March.
By Daniel Pimlott and Michael Mackenzie in New York
Copyright The Financial Times Limited 2006
Published: September 25 2006 16:05 | Last updated: September 25 2006 16:05
Prices of existing homes fell for the first time in 11 years and the backlog of available homes for sale was at its highest since current measures began, underlining the significant slowdown in the housing market.
Existing-home sales slipped 0.5 per cent to an annual rate of 6.30m units in August from a level of 6.33m July, according to the National Association of Realtors. They were 12.6 per cent down on the year before
Economists had expected a fall in sales to 6.2m, following a sharp 4.1 per cent decline in sales in July.
“The housing market continues to weaken, but the deterioration in this report was relatively modest,” said John Ryding, economist at Bear Stearns.
The Federal Reserve has recently justified its pause in interest rate rises by saying that weakness in the housing sector will put the brakes on growth and help slow down inflation. The latest numbers suggest that the central bank may soon start lowering rates.
‘’Housing is in trouble, the economy is a lot weaker than people think and the Fed will ease policy much faster than what is currently priced by markets,’’ said Michael Kastner, head of fixed income at SterlingStamos.
The housing data pulled the yield on the two-year Treasury note down to about 4.65 per cent, its lowest level since March.
David Lereah, the NAR’s chief economist, said home sales appeared to be levelling out after a sharp drop in July. “After a stronger-than-expected drop in July, the fairly even sales numbers in August tell us the market is at a more sustainable pace,” he said.
The decline follows weak data on housing starts and building permits in August.
The median existing home price was $225,000 in August, down 1.7 per cent from a year earlier - the first price fall since 1995 and the second biggest decline on record . “This is the price correction we’ve been expecting – with sales stabilising, we should go back to positive price growth early next year,” Mr Lereah said.
Housing inventory levels rose 1.5 per cent to a 7.5 month supply at the current sales pace, compared with 6.3 months in July, and 4.7 months at this time last year. The inventory was at its highest since since condominiums were added to the survey in 1999.
Existing home sales account for about 85 per cent of the housing market. They have fallen every month since March.
posted by Carlos T Mock @ 11:04 AM
0 Comments:
Post a Comment
<< Home