Existing home sales rose 4.3% to 4.57 million units, their highest level since May 2010, but homebuilder stocks mostly fell on the news. Even though the results from the National Association of Realtors showed some strength, they were below economists’ expectations, and December results were revised down to 4.38 million from 4.61 million. Median sales prices also fell 2% year over year. Inventories fell to nearly seven-year lows.
KB Homes (KBH) was down 3.2%.
“Existing home sales have risen almost 13% over the last six months and the increase in sales has been accompanied by a slowing in the pace of home price declines,” write John Ryding and Conrad DeQuadros of RDQ Economics. “This suggests that conditions in the home resale market may be improving, though resales remain at relatively low levels.� The rise in existing home sales in recent months adds to the indication from housing starts, building permits, and homebuilder sentiment that the sector has improved modestly since the middle of 2011.”
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