NICE BOUNCE, BACK ABOVE 5 MILLION

Existing Home Sales Wednesday September 21, 2011

Record High: 7.25 M (09/05)

Percent Change from Record High: -30.6%

Existing home sales jumped 7.7% in August to an annual rate of 5.03 million compared to market expectations for a small increase to a level of 4.75 million. Existing home sales are now 18.6% above their year ago level but remain 30.6% below their September 2005 peak. All cash sales accounted for 29% of transactions; distressed sales were 31% of the total, first-time buyers comprised 32% of sales while investors made up 22% of total transactions. Regionally, sales were up solidly in all areas with over an 18% gain in the West. The inventory of homes available for sale fell 3.0% on the month to 3.577 million which represents an 8.5 month-supply at the current sales pace. Foreclosures are rising again as the banks unwind the backlogs related to robo-signings; inventories could increase and prices may weaken further. Home prices declined again in August with the median price for an existing home down 5.1% over the past year to $168,300 while average prices dropped 4.0% to $216,800. Existing home sales are weak but remain within the range seen in the last couple of years. The housing market recovery continues to be thwarted by a weak economy and stagnant labor market conditions. The upside surprise in August sales at least lets us know the housing market is not falling off a cliff. Sales would have been stronger if not for the large number contract failures. Economists expect home resales to bump along the bottom the remainder of the year with a price and sales recovery beginning sometime in 2012.
MILLIONS OF UNITS Forecast: Consensus*: Actual: 4.75 M 4.75 M 5.03 M Monthly Changes Aug-11 5.03 7.7 18.6 770 2.7 1,090 3.8 1,940 5.4 1,230 18.3 3,577 -3.0 -13.1 8.5 168.3 -5.1 216.8 -4.0 Jul-11 4.67 -3.5 21.0 750 2.7 1,050 1.0 1,840 -1.6 1,040 -12.6 3,686 -0.8 -8.0 9.5 171.2 -6.0 220.4 -4.9 Jun-11 4.84 0.6 -7.5 730 -5.2 1,040 1.0 1,870 1.1 1,190 2.6 3,717 1.9 -4.4 9.2 175.6 -4.0 226.0 -1.7 May-11 4.81 -3.8 -15.3 770 -2.5 1,030 -5.5 1,850 -5.1 1,160 -0.9 3,646 -3.0 -6.3 9.1 169.3 -3.0 217.6 -1.5 Three Month 4.85 Six Month 4.91 Average Changes for Twelve Month 2010 2009 4.87 4.92 -4.5 750 1,060 1,883 1,153 768 1,060 1,903 1,175 778 1,043 1,870 1,178 863 1.8 1,168 3.5 1,907 2.7 1,214 14.4 3,560 8.4 8.7 172.4 -0.2 219.5 1.2 5.15 5.2 848 -16.0 1,128 -15.2 1,857 -17.3 1,062 -2.8 3,283 -11.3 7.7 172.7 -12.4 216.8 -10.2 996 1,342 2,258 1,268 988 1,356 2,200 1,295 Five Year 5.43 Ten Year 5.81

Existing Home Sales (millions) (percent change) (year-on-year percent change) Northeast (thousands) (percent change) Midwest (thousands) (percent change) South (thousands) (percent change) West (thousands) (percent change) Inventory (thousands) (percent change) (year-on-year percent change) Months' Supply Median Sales Price ($000) (year-on-year percent change) Average Sales Price ($000) (year-on-year percent change)

3,660

3,651

3,659

3,593

2,935

9.1 171.7

8.9 167.6

9.1 166.7

8.0 196.2

6.2 188.5

221.1

216.4

214.9

242.0

232.8

Source: Bureau of the Census, Department of Commerce Via Haver Analytics. Data, graph & table courtesy of Insight Economics *Bloomberg 2011 HousingMatrix, Inc. http://www.HousingMatrix.com | All rights reserved. Reproduction and/or redistribution are expressly prohibited. Hot Sheet is a registered trademark of HousingMatrix, Inc. Information contained herein is based on sources we believe to be reliable, but accuracy is not guaranteed.