Winter has been tough for home sales.
After a big drop of 17% December, the January Existing Home Sales report yielded a 7% slide. An “existing home” is a home not being resold by a previous owner. It essentially excluded only new construction.
Existing Home Sales data on an annualized and adjusted basis shows:
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- Sales volume is at its lowest levels since June 2009
- Sales volume fell below its 12-month rolling average
- Home supplies are at a 5-month high
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This mirrors the data from the government’s New Home Sales data released last week. That report put new home sales at a 40-year low and showed new homes supplies higher by an entire month.
This is not a crisis and hasn’t moved housing off of its rebound. Home sales are always cyclical and outside forces always influence the market. Now is no exception.
For one, home sales were so high in October and November due to the original November 2009 first time home buyer tax credit expiration. Many buyers shifted out of December/January and into October/November. This is a natural reason for the dip.
Over the long-term trend, the numbers came in near to what you’d expect as a rolling average. A smaller, but important part was that January’s weather was awful from Mexico to Canada. That will slow down home sales.
We’re seeing higher activity in February and March. It’s unlikely that we’ll see a repeat of last Apri-November’s run, but there are enough buyers to support this housing rebound. The good news of the sagging sales reports is that today’s buyers may find home prices are lower and sellers are more willing to negotiate.
Tags: Existing Home Sales, first time home buyer, first time home buyer tax credit, new construction, New Home Sales