Instant View: Existing home sales hit 11-month high in December
NEW YORK (Reuters) - Sales of previously owned U.S. homes rose to an 11-month high in December and the supply of properties on the market dropped to a near 7-year low, an industry group said on Friday, pointing to a nascent recovery in the housing market.
IAN LYNGEN, SENIOR GOVERNMENT BOND STRATEGIST, CRT CAPITAL
GROUP, STAMFORD, CONNECTICUT:
"Overall, a near-expected improvement in existing home sales with supply slowing and prices remaining soft. Treasuries are doing nothing with the data, holding onto the weakness from earlier this morning. From here, we have the NY Fed buyback in the February 2036 to November 2041 sector with a range of $2.25 billion to $2.75 billion. Volumes have been strong today."
KATHY LIEN, DIRECTOR OF CURRENCY RESEARCH, GFT FOREX, JERSEY
CITY, NEW JERSEY
"Home sales were slightly weaker than expected but still relatively firm and the most encouraging aspect of the report was the rise in prices. Inventory is starting to move and home owners are beginning to feel more confident about asking more - which is a healthy trend for the housing market. However, the labor market needs to stabilize before the housing market can fully recover."
"The heydays of the housing market are far behind us and it will be a long tough road to recovery. In fact, we still believe that housing will remain depressed for most of the year and the only way the Federal Reserve can help is by keeping interest rates low and monetary policy easy."
LAWRENCE GLAZER, MANAGING PARTNER AT MAYFLOWER ADVISORS IN
"The data is generally in line. There's a growing perception that the worst is behind us in housing and that the sector has bottomed on a national basis."
MILLAN MULRAINE, SENIOR MACRO STRATEGIST, TD SECURITIES, NEW
"It wasn't as strong as we thought but it's still decent. It certainly shows that the improvement we've seen over the past few months is being sustained. The inventory of unsold homes is at its lowest level in some time so it certainly does suggest that a big dent is being made into the huge inventory of unsold homes that have been weighing very heavily on the market and on prices more generally. At this point it's not only the level of sales but the direction of sales so that certainly does offer some encouragement going forward. If rates continue to be at record lows and we see improvement in the labor market then that's certainly bullish for the labor market going forward."
BRIAN DOLAN, CHIEF STRATEGIST, FOREX.COM, BEDMINSTER, NEW
"Home sales such as they are were pretty much in line with expectations. Housing remains a major millstone around the neck of U.S. economy, and that won't change soon. The speculation is that we'll get some indication of a future QE3 next week, though I think that won't come until March. If that's the case, I think the dollar snaps back. For now, though, we're still waiting on the result of the Greek debt negotiations and seeing the euro recover as the people unwind short positions on euro crosses."
JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS,
"I think it was broadly as expected here. We have to keep in mind that milder December weather had something to do with the pickup.
"If you look at the report the supply fell, but what that doesn't take into account is the shadow overhang, the distressed side of the market, people that are basically delinquent on their mortgages and haven't gone through foreclosure yet. That pipeline is worth seven million units, and represents about 20 months of supply. The distressed is still a huge problem. When you look at home prices overall in the U.S. I think they're still going to decline modestly in 2012."
JOHN DOYLE, CURRENCY STRATEGIST, TEMPUS CONSULTING,
"It underperformed the forecast but does show a sector of the economy that has been a large weight on growth has started to stabilize over the last few months and we will continue to look for momentum in 2012. We can attribute that to low mortgage rates and an up-tick in the unemployment situation.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON
"December's existing home sales total of 4.61 mln was a little below the consensus of 4.65 mln, though up a solid 5.0% due to November being revised down to 4.39 mln from 4.42 mln. The data is another indicator suggesting housing sector improvement, with even some tentative hints of recovery in prices, while a falling inventory of existing homes for sale may encourage construction of new ones. However the level of December sales does hint that the surge in November pending home sales overstated the picture. Looking into the breakdown there are more minor disappointments, with gains led by regions that may have benefited most from mild weather, and a rise in distressed sales but a fall in sales to first time buyers. "
STOCKS: U.S. Stocks held onto earlier losses.
BONDS: U.S. Treasury debt prices held onto earlier losses.
FOREX: The dollar held onto earlier gains versus the euro
(Americas Economics and Markets Desk; +1-646 223-6300)
- Lost passenger jet was diverted deliberately: Malaysian PM
- Exclusive: Radar data suggests missing Malaysia plane deliberately flown way off course - sources
- Malaysia PM says lost plane's movements indicate a deliberate act
- UPDATE 2-Satellite data shows missing Malaysia plane may have flown thousands of miles-source
- UPDATE 1-Rolls-Royce concurs with Malaysia on missing jet's engine data