US existing home sales up 3.1% in July

Aug 26, 2008
US existing home sales up 3.1% in July

NEW YORK: The pace of existing home sales in the United States rose
last month to a five-million-unit annual rate, the National
Association of Realtors said in a report yesterday.

The report showed prices dipped while the inventory of homes hit a
record high. The inventory of homes for sale rose to a record 4.67
million units or a 11.2 months' supply at the current sales pace,
matching a record set in April.

The median national home price declined 7.1 per cent from a year ago
to US$212,400 (S$299,000).

According to Mr David Wyss, chief economist at Standard & Poor's, the
3.1 per cent rise in sales was a bit better than expected.

'I think we are beginning to see some early signs that bargain
hunters are showing up and sales have been doing a little bit better
over the last few months than expected... It's a little bit
encouraging,' he said.

'We're seeing more and more people putting their houses on the
market, and that's to be expected because when sales pick up, usually
the inventory picks up... Obviously things are still very weak. Five
million units is not very much,' he added.

Said Mr Boris Schlossberg, director of currency research at AFT
Forex, New York: 'The market was expecting a bounce anyway, but this
is still mildly dollar-positive. I do think the impact on the dollar
would be short-lived. The flows this week are still being driven by
macroeconomic factors such as oil and equities.'

He added that whether the crisis in the housing sector will end or
not will depend largely on oil prices. 'If oil continues its decline,
then that should boost consumer spending and hopefully support the
housing market,' he said.

According to Mr Philip Dow, director of equity strategy at RBC Dain
Rauscher, however, the problem cannot get better until the inventory
begins to decline.

'Our best guess is that it'll be the middle of next year before you
begin to see any improvement,' he said.