Highlights
In perhaps the best housing report of the great housing slump, existing home sales jumped 6.5 percent in December to a 4.740 million unit annual rate -- a gain that indicates lower mortgage rates are now boosting home sales. The jump cut nicely into supply on the market, now at 3.676 million homes and down nearly 12 percent from November and making for 9.3 months of supply at the current sales rate, down steeply from November's 11.2 months.

Lower mortgage rates is one factor helping sales as are, unfortunately, falling home prices. The median price fell 2.7 percent in the month to $175,600 with the year-on-year rate showing accelerating erosion at -15.3 percent -- a rate that the report says is probably the largest since the 1930s. Falling home prices point to rising foreclosures and even greater stress on the banking system.

Other notes in the data include a slight downward revision to November, to 4.450 million from 4.490 million, and a year-on-year sales rate that is down only 3.5 percent, a big improvement from the double-digit contraction of November. December sales showed big improvement in the West with solid improvement in the South and Midwest and slight decline in the East.

Though declining home prices are definitely a concern, money moved into the stock market and out of the Treasury market in immediate reaction to the results. Today's report, which may jolt what had been a very depressed outlook on the housing market, will lift expectations for improvement in Thursday's data on new home sales.

Market Consensus Before Announcement
Existing home sales toppled by another 8.6 percent month-to-month in November to a 4.490 million annual rate. The year-on-year rate, which had been improving, sank back into double-digit decline at minus 10.6 percent. The big issue, of course, is inventory. Supply on the market jumped more than one full month in November to 11.2 months. Not surprisingly, prices dropped another 2.8 percent for a year-on-year decline of 13.2 percent.

Existing home sales Consensus Forecast for December 08: 4.40 million-unit rate
Range: 4.20 to 4.60 million-unit rate

2009 Release Schedule

Released On: 1/26 2/25 3/23 4/23 5/27 6/23 7/23 8/21 9/24 10/23 11/23 12/22 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov