Housing: No Bottom In Sight

Housing: No Bottom In Sight

Existing Home Sales (Nov) Actual 4.49M, Expected 4.90M, Previous 4.91M (Revised from 4.98M)

Release Explanation: Annualized number of existing residential buildings that were sold during the previous month, excluding new construction. They include both quantity and price statistics. Important since the housing market is included in most economic forecasts. Retail Sales, CPI, and PCE in the US. A happy householder will usually lead to a strong economic outlook. A miss here, either way, and the Markets gets to see the real confidence of the US consumer. There is a very strong impact on the sentiment towards the US Dollar from this report.

Trade Desk Thoughts: Existing home sales declined 8.6% in November to a 4.49 million annual pace, the national Association of Realtors (NAR) said today. For the year, sales dropped 10.6% after averaging 5.67 million in 2007. The median price dropped 13.2% to $181,300 from a year earlier, the biggest decline since records started in 1968 and “probably the largest price decline since the Great Depression,” although records don't go back that far, said NAR Chief Economist Lawrence Yun. Inventory increased to 11.2 months of supply at the current sales pace, up from 10.3 months in October.

"The report is a complete disaster and indicates there is no bottom here," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "Sales way down, prices declining by the most on record and inventories rising means the economy is heading into its worst recession in the post-war period."

Foreclosures and short sales accounted for 45% of last month's home purchases, Yun said. Resales of single-family homes fell 8 percent to an annual rate of 4.02 million. Sales of condos and co-ops declined 13 percent to a 470,000 rate.

Forex Technical Reaction: A fairly muted reaction was seen in the currency and equity markets on thin holiday volume.

New Home Sales (Nov) Actual 407k, Expected 417k, Previous 419k (Revised from 433k)

Release Explanation: Annualized number of new single-family homes that were sold during the previous month, released by the Census Bureau.

Trade Desk Thoughts: Purchases of new homes fell 2.9% in November to an annual pace of 407,000, the Commerce Department today, to the slowest pace in 17 years. In the year to November, he median price of a new home decreased to $220,400. Sales of new homes were down 35% from a year ago. The report showed that builders were reducing inventory; The number new homes for sale fell a record 7% to 374,000, the fewest since February 2004.

Forex Technical Reaction: The markets remain very quiet this morning on thin holiday volume.

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