Highlights
Momentum in the housing market has slowed, indicated by yesterday's dip in existing home sales and by today's weaker-than-expected report on new home sales. New home sales edged 0.7 percent higher in August to a 429,000 annual rate that compares unfavorably with expectations for 445,000. August's level would have been below July's level were it not for a downward revision with July now reading 426,000 vs. an initial 433,000.

There has been some hope based on Case-Shiller data that home prices were bottoming, but price indications from the latest new and existing home sales reports show further deterioration. The median price of a new home tumbled 9.5 percent in August to $195,200 for the lowest level since 2003, an indication that homebuilders are giving customers big concessions. The median price of an existing home fell 2.1 percent in August. But low prices are moving homes off the market which is a big plus for future sales and future prices. New homes on the market fell 3.0 percent in the month to an adjusted level of 262,000, making for 7.3 months of supply at the current sales rate which is the lowest level in more than 2-1/2 years.

The approaching end of the $8,000 first-time buyer credit raises questions whether the housing sector will continue to improve in the months ahead. Home buying plans in the Conference Board's consumer confidence report showed some improvement in August but off of very low levels. There was limited initial reaction to the report which however did stem commodity and equity gains that were building following the 9:55 a.m. ET release of a favorable consumer sentiment report.

Market Consensus Before Announcement
New home sales surged 9.6 percent in July, following an upwardly revised 9.1 percent surge in June. The 433,000 annual unit pace was the best since September 2008. Importantly, the strong sales have been working down supply-good news for homebuilders. Supply is down to 7.5 months, the lowest level since April 2007.

2009 Release Schedule

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