Purchases of existing homes dropped 1.2 percent to an annual rate of 4.97 million, the fewest since the National Association of Realtors began keeping the records in 1999. Orders for items made to last several years fell 0.4 percent, the Commerce Department said today in Washington.
There are only two numbers that are important in this report: inventory and months of supply.
Inventory is still sky high.
And months of inventory available is still increasing.
And this isn't including any of the projected foreclosures for next year.
Simply put, this is called a "super-glut".
2 comments:
This caused me to wonder...
As the number denoting the purchases of existing homes continues to fall, and the inventory of homes for sale increases (or plateaus), it seems that the months of supply number will continue to increase, as the "average" (homes purchased per month) used to compute months of supply continues to fall.
Each movement (purchases continuing to fall/inventory continuing to increase) will magnify the increase in months of supply.
It is possible that the months of supply number will remain at (or above) its current level for a very long time (i.e. much longer than is forecasted).
The housing glut continues to get worse, durables have declined for a full quarter, and there are good reasons to be very skeptical of the employment figures.
And yet the market it up big time today over hints from the Fed there will be a further reduction in interest rates. Is it just me, or is there a massive disconnect between the very-well-paid folks on Wall Street and the folks struggling to pay their heating bills on Main Street?
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