Trade Desk Thoughts - Existing Home Sales
Trade Desk Thoughts - Existing Home Sales
Existing Home Sales (August) Actual 4.91M, Expected 4.93M, Previous 5.02M (Revised from 5.0M)
Release Explanation: Annualized number of existing residential buildings that were sold during the previous month, excluding new construction. They include both quantity and price statistics. Important since the housing market is included in most economic forecasts. Retail Sales, CPI, and PCE in the US. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the US consumer. There is a very strong impact on the sentiment towards the US Dollar from this report.
Trade Desk Thoughts: Existing Home Sales fell 2.2% in August to an annualized pace of 4.91M. In the year to August, sales of existing homes fell 10.7%. Monthly sales declined by 6.6% in the Northeast and 5.3% in the West, while sales in the Midwest increased 0.9% and sales in the south increase 0.5%. For the year, sales declined 15.0% in the Northeast, 12.3% in the Midwest and by 15.1% in the South. Yearly sales increased 4.9% in the West. The median sales price decreased 3.3% in August and by 9.5% for the year. Inventories of unsold properties decreased 7.0% in August and by 2.9% for the year. The backlog of unsold homes decreased to a 10.4 month supply, down 4.6% in the month but up 8.3% for the year.
“The good news is that inventories declined,” said Matthew Carniol, chief currency strategist at TheLFB-forex.com. “The average rate for a 30-year fixed rate mortgage in August was 6.48%, and that served to limit sales. The decline in the rate during September should be a boost to sales going forward once the constraints in the credit markets ease.”
Forex Technical Reaction: Currency valuations have held fairly steady after the report as the market listens to Mr. Bernanke’s testimony before the U.S. House of Representatives. The S&P is trading 0.35% lower and oil is up $1.65.
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