U.S. Home Sales Decline, GDP Left Unchanged

123jump.com Staff
23 Dec, 2008
New York City

U.S. existing home sales declined at a faster pace in November and median price of a home fell too. The home sales were the steepest in the Northeast followed by the South. The new home sales declined at 2.9% to 407,000 homes. The third quarter estimate of GDP decline was left unchanged at 0.5%.

[R]11:15AM New York – U.S. third quarter estimate of G.D.P. was left unchanged and existing homes sales decline at a faster pace in November.[/R]

U.S. revised its estimate of corporate profit downward and left economic growth rate unchanged.

In the latest estimate the Commerce Department reported economy shrank at 0.5% annual rate in the third quarter ending in September and corporate profits declined at revised annual rate at 1.2% from an earlier estimate of 0.9%.

The economy is declining at a much faster pace in the current quarter that will end in less than a week. Most economists are looking for the U.S. economy to shrink between 5% and 6.5%. The economy last shrank at 6.4% in the first quarter of 1982.

The National Bureau of Economic Research estimates that the economy slipped into recession in fourth quarter of 2007 and is likely to step out of it in summer of 2009 and that will make the current recession as the longest and may be the deepest in the last sixty years.

November Home Sales Decline Accelerates

Separately, seasonally adjusted existing home and condominiums sales in November declined 8.6% from revised October rate and fell 10.6% from a year ago. Home sales are likely to decline further in December and in the first two quarters of next year as job losses rise and economy shrinks.

Inventory of unsold homes rose to 4.2 million homes, a supply of 11.2 months up from 10.3 months in October.

Median home price for all housing types declined 13.2% to $181,300 from a year ago price of $208,800. Single family sales in the month declined 8% to a rate of 4.02 million from October and dropped 8.8% from a year ago.

Homes sales of all types fell the most in Northeast, 12% followed by decline of 10.9% in the South, of 7.4% in Midwest and 4.3% in the West.

New Home Sales Decline 2.9%

Seasonally adjusted new home sales in November declined 2.9% to 407,000 annual rate from October rate of 419,000. The home sales plunged 35.3% from a year ago in the month. Median home price declined to $220,400 and average price was $287,500. The new home for sales inventory at the end of November was 374,000, an 11.5 month inventory.

Weak Auto Stocks

Stocks are weak in the early hours of trading. Of the stocks in S&P 500 index, 290 declined, 201 rose and 9 are unchanged.

Ford Motor led decliners in the S&P 500 index with a loss of 16.7% followed by losses in Textron Inc of 16.4%, in General Motors of 13.9%, Jones Apparel of 10% and in Covidien Ltd of 5.8%.

Prologis led gainers in S&P 500 index with a rise of 16.3% followed increase in Prudential Financial of 7%, in CIT Group Inc of 4.7%, in Lincoln National Corp of 4.6% and Starwood Hotels of 4.6%.

Europe Markets Review

In London FTSE 100 Index traded higher 33.13 or 0.78% to 4,282.29, in Paris CAC 40 Index increased 7.15 or 0.23% to 3,158.51 and in Frankfurt DAX index traded higher 22.94 or 0.49% to 4,661.96. In Zurich trading SMI increased 42.75 or 0.79% to 5,462.27.

Asian Markets Review

Hang Seng index in Hong Kong decreased 401.60 or 2.75% closed to 14,220.79 CSI 300 index in China lower 98.59 or 4.89% closed to 1,918.96. ASX 200 index in Australia decreased 26.00 or 0.73% to close 3,531.40. The KL Composite index in Malaysia lower 2.27 or 0.26% closed to 871.16. Markets in Japan were closed today.

The Kospi Index in South Korea decreased 35.30 or 2.99% to close at 1,144.31. SET index in Thailand closed higher 6.32 or 1.46% to 440.40 and JSE Index in Indonesia decreased 1.59 or 0.12% to 1,343.72. The Sensex index in India decreased 241.60 or 2.43% closed to 9,686.75.