Housing Numbers Continue to Surprise

September 27, 2005
Amey Stone

This week has brought the latest monthly home sales data from the
National Association of Realtors. Reading these releases is starting
to be a bit of a yawn -- sales weren't quite at record levels, but
darn near close to it.

Today we got new home sales figures. Sales slipped a bit to 1.24
million homes (annualized) from 1.37 in July. The slip came after a
surge in July, so it isn't meaningful, notes High Frequency
Economics. Plus, as the Valhalla, New York-based research firm
reports, "Recent mortgage applications data suggest sales will run at
about 1.35 million for the next few months; there is no sign of any
trend weakening."

Monday's existing home sales showed a 2% rise to 7.29 million
annualized -- the second highest level ever. Prices jumped 16.2% over
last year -- the fastest rise in 26 years.

High Frequency Economics believes new home price gains are lagging
existing homes because of an oversupply of new construction. The dip
is simply an inventory correction, much like the one the
manufacturing sector is experiencing, the firm concludes.

05:09 PM