Wall Street Strategies
Hello! Sign in or Register


Existing Home Sales Soften

11/20/2013
By David Urani

Existing home sales for October ran at 5.12 million units annually, which was down 3.2% from September. That was just about in line with the 5.13 million consensus estimate, and the lowest level since June. Declines were seen in all regions but particularly in the West, which was down 7.1% to the lowest point since January. So it was a decline in sales, but for months now the market has been bracing for softening in the housing market. Inventory was also down 1.8% to its lowest level since March, brining months’ supply to 5.0 from 4.9. So inventory isn’t building up and that means prices should stay in check, and it also suggests we’re still a long way from the housing market going into crisis again.

 

Homebuilders’ stocks were not taken back by the report, as the market has already assigned a discount to the sector, perhaps one that overcompensates for the current reality. Housing stocks, as measured by the Dow Jones US Home Construction Index, continue to fight to come off a trough and remain nearly 20% below the May peak.

 

Looking forward there doesn’t look to be a positive catalyst in store in the near term for housing. However, that negative catalyst in mortgage rates has mostly been kept quiet in the past couple of months, after spiking earlier this year. As had been much of the case with homebuilder stock action in recent months, Federal Reserve policy could be more of a driving factor than the actual fundamentals like today’s existing home sales report. And on that note Janet Yellen certainly appears just as dovish, if not even more so, than Bernanke.

David Urani
Wall Street Strategies

More Articles by David Urani


 

Add a Comment!

Name:
Email:
Comment:
 
 
Submitted comments are subject to moderation before posting.


Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Privacy Policy | Terms of Use |
All Rights Reserved.