by Calculated Risk on 3/24/2008 10:00:00 AM

The NAR reports that Existing Home sales were at 5.03 million (SAAR) unit rate in February.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007.

Click on graph for larger image.

The first graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in February 2008 (5.03 million SAAR) were the weakest February since 1998 (4.77 million SAAR).

Here is a graph of Not Seasonally Adjusted existing home sales for 2005 through 2008.

This graph shows that sales have plunged in February 2008 compared to the previous three years. This also shows that February is typically one of the least important months of the year for existing home sales. The data for March will be much more important since that is the beginning of the Spring selling season.

The third graph shows nationwide inventory for existing homes. According to NAR, inventory decreased to 4.03 million homes for sale in February.

Total Total housing inventory fell 3.0 percent at the end of February to 4.03 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.2-month supply in January.

The typical pattern is for inventory to decline in December, and then to slowly rebound in January and February, and really start to increase in March.

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 decreased to 9.6 months.

NOTE: NAR reported months correctly (my mistake)

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. I'll have more on inventory later.