NEWS / Foreign Exchange

Hefty Decline in Existing Homes Sales Underscores Grim Status of Housing Market

Sales of existing homes fell 8.4% in March to an annual rate of 6.12 million units. This level of existing home sales is the lowest since June 2003. Sales of single-family existing home plunged 9.5% in March to an annual rate of 5.32 million units.

Sales dropped in all four regions of the nation. The large drop in sales of existing homes after three consecutive monthly gains is being attributed to bad weather. This is a story for optimists refusing to understand the dire reality of the housing market. Sales of existing homes have now dropped to the lowest level in nearly four years and it is a widespread weakness that should not be brushed aside as a temporary event. Sales of existing single-family homes are down 15.6% from a peak reading of 6.3 million units in September 2005.

The median price of an existing single-family home rose 1.4% from February to $215,300 but is down 0.9% from a year ago. On a year-to-year basis, the median price of an existing single-family home has dropped for nine straight months.

The inventory of unsold existing homes rose to a 7.3-month supply in March from a 6.8-month mark in February. Anecdotal reports on the housing market continue to present a weak situation that is more than troubling.

Consumer Confidence Dips In April

The Conference Board??™s Consumer Confidence Index fell to 104.0 in April after a revised 108.2 reading in March. The April reading of the Consumer Confidence Index is the lowest since August 2006. Both the Present Situation (131.3 vs. 138.5 in March) and Expectations (85.8 vs. 87.9 in March) indexes declined in April. The Consumer Sentiment Index of the University of Michigan also posted a decline in the early-April survey.

Jobs were reportedly harder to find in April compared with March (Job-Hard-to-Get index declined to 20.4 vs. 18.9 in March) and jobs were less plentiful (Jobs-Plentiful index fell to 27.8 vs. 30.3 in March) during the same period.