by WARREN MOSLER
Less than expected and last month’s number revised a bit lower, so still no contribution to growth for the year:
Lack of supply pulled down existing home sales in December and may very well pull down sales in January as well. Existing home sales fell 3.6 percent in December to an annualized rate of 5.570 million which is near the low end of Econoday’s consensus. But November, despite a small downward revision to a 5.780 million rate, remains by far the best month of the expansion, with the 5.700 million rate in March last year the next strongest.
Supply in December’s market fell a very steep 11.4 percent in the month to 1.480 million homes. On a sales basis, supply fell from 3.5 months in November to 3.2 months which is a record low in 19 years of available data. Lack of choice is an increasing problem for the resale market.
Prices softened slightly which won’t be drawing new homes onto the market. The median slipped 0.2 percent in the month to $246,800 for a year-on-year increase of 5.8 percent.
This year-on-year price rate is well above the 1.1 percent gain in overall sales which points perhaps to future price concessions and even less supply. On the year, supply is down a very sizable 10.3 percent.
The split between single-family and condo sales shows weakness for the latter, with sales down 11.6 percent on the month to a 610,000 annualized rate. Single-family sales fell a monthly 2.6 percent to 4.960 million.
Housing data are usually volatile which should take the surprise out of December’s weakness. Still, resales remain solid though the lack of supply is a serious obstacle for future sales.
Trumped up expectations pretty much fully reversed for the service sector purchasing managers index?
Up a few jobs but you can see it’s about very small numbers: