Home Sales Rise in September

October 28, 2008--The economic indicators released last week provided some good news in the face of a gloomy stock market and global economy. The Conference Board’s leading indicators posted a slight increase in September, buoyed by a larger money supply. Existing and new home sales were up for the month.

 

Conference Board’s Leading Indicators
The Conference Board’s Index of Leading Indicators increased 0.3% in September, after falling 0.9% in August. The index was propped up by an increase in the money supply and improved consumer expectations. The largest drags on growth were reduced stock prices, decreased residential building permits, and increased claims in jobless benefits. Even with September’s gains, the index has contracted at its fastest pace since 1990 when the losses over the past three months are taken into account.

 

Existing Home Sales
The National Association of Realtors projected that existing home sales rose 5.5% month over month in September, following a decrease of 2.2% in August. Available inventory remained high, at 9.9 months, in September. The median price for a home fell from $203,000 to $191,600, which may be enticing hesitant buyers back into the market. Compared to one year ago, existing home sales are off 9%. Though September provided some positive news, the housing market remains in turmoil, as the worldwide financial crisis and a domestic recession will keep potential buyers out of the market.

 

New Home Sales
In September, new home sales increased 2.7%, with 464,000 units being sold, That’s an improvement from August, when new home sales declined 12.6%. Compared to September of 2007, new home sales have plummeted 33.1%. Inventory of new homes decreased slightly to 10.4 months during September. New home sales will remain weak going forward, as potential buyers face stricter lending terms and might be reluctant to buy during the current economic upheaval.