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Tight inventory contributed to a 3.7% M/M drop in existing home sales in February after January’s 10-year record high. Compared to February 2016, sales were up by 5.4% Y/Y, and prices were up 7.7%, but inventory had declined by 6.4%. Sales of single family homes dropped by 3.0% M/M, but were up 5.8% Y/Y, and sales of condos dropped sharply 9.2% M/M, with a minor 1.7% Y/Y gain.
New home sales, which constitute about 10% of the home sales market, were at a nine year high in 2016, and the first two months on 2017 continued that trend. February sales were up 6.1% M/M, and 12.8% Y/Y, with prices down 3.9% M/M and 4.9% Y/Y. New home supplies were up by 1.5%, but increasing demand brought supply down from 5.6 months to 5.4 months.
Orders for new non-defense aircraft drove February’s 1.7% increase in durable goods orders, and January’s orders were substantially revised upwards from 1.8% to 2.3%. However, core capital goods orders, which exclude aircraft and defense orders and are a better index for business investment plans, decreased by 0.1% in February, with January’s rate revised upwards from -0.4% to 0.1%. Compared to the same period in 2016, the year to date increase in durable goods orders is up 1.6%, and core capital goods orders are up 1.3%.
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