November existing home sales wowed the market on Thursday with an impressive 0.6% increase versus the expected 1.0% decline. Sales of existing homes are down 10.7% from last year but the mood is positive in the marketplace that the housing slowdown is bottoming out. More to the point is the median price of these homes is lower on a year over year basis. The important median price has shown a year over year decline for the last four months.
Other information in the report worth mentioning is the inventory level which did drop in terms of number of months of inventory. This number dropped 0.1 months to 7.3 months and does reflect the higher rate of sales in the just reported month. Still, we think 7+ months of inventory is fairly high especially with prices dropping. The mood on Wall Street, as we mentioned earlier, was bullish housing so the bond market took another beating on Thursday.
The stock market had a bad start but managed to reverse some of those losses late in the day. The last few minutes of trading pushed the indexes into negative territory so the Dow failed to make another new high. That’s not to say that the Dow won’t have one last push over the next week or so.
With the death of former president Ford, the stock market is considering taking the Tuesday trading session off so the country can properly mourn. We can respect this move by the market. That means that we will probably not be writing another post until Tuesday evening.
We want to wish all of you a Happy New Year. It is our wish that you and your family prosper in the New Year.
With that in mind, we are considering making a few changes to the Update in the coming year. Please feel free to make comments on things you might like to hear about or changes you would like to see. These types of comments are welcome at anytime, especially now as we try to improve the quality of this blog.
Dow Industrials: 12,501.52 -9.05