U.S. existing home sales took a bigger-than-expected drop in November. Sales took a 6.1% nosedive to 4.93 mln units annualized,leaving the level of sales at the lowest since May. this is the 5th monthly decline of 2014, and the largest monthly drop since July 2010.
According to BMO CM Reasearch, this is not a «Grinch-like story». There were some positive takeaways in this report:
- Of the closings, first-time homebuyers made up 31%, the largest share since October 2012. Granted this is still far from the 40%-to-45% range during normal times but after spending the last 19 months below 30%, this increase is a very encouraging development. Perhaps the slower rise in home prices helped…..the median sales price rose 5.0% y/y, the 2nd straight month that the gains slowed. (Good for buyers, not as much for sellers.)
- The investors' share was steady at 15%, which left repeat homebuyers accounting for a still-solid 54%.
- All in, housing will receive solid support from efforts to relax mortgage lending rules, easier rules to help first-time homebuyers get into the market (reducing their down payments' requirement), and steady job growth. This is likely a temporary setback.
The material has been provided by InstaForex Company – www.instaforex.com