by Calculated Risk on 2/25/2008 10:00:00 AM

The NAR reports that Existing Home sales were at 4.89 million (SAAR) unit rate in January.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – slipped 0.4 percent to a seasonally adjusted annual rate1 of 4.89 million units in January from an upwardly revised level of 4.91 million in December, and are 23.4 percent below the 6.44 million-unit pace in January 2007.

Click on graph for larger image.

The first graph shows monthly sales (SAAR) since 1993.

This shows sales have now fallen to the level of July 2000.




The second graph shows nationwide inventory for existing homes. According to NAR, inventory increased to 4.19 million homes for sale in January.

Total housing inventory rose 5.5 percent at the end of January to 4.19 million existing homes available for sale, which represents a 10.3-month supply at the current sales pace, up from a 9.7-month supply in December.

The typical pattern is for inventory to decline in December, and then start to rebound in January. This is probably just the beginning of the inventory build for 2008.

I'd expect record levels of existing home inventory later this spring and summer.


The third graph shows the 'months of supply' metric for the last six years.

Months of supply increased to 10.3 months. This follows the highest year end months of supply since 1982 (the all time record of 11.5 months of supply).

Even if inventory levels stabilize, the months of supply could continue to rise - and possibly rise significantly - if sales continue to decline.

More later today on existing home sales.