CHICAGO, May 20, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Sherwin Williams (NYSE: SHW), La-Z-Boy (NYSE: LZB), USG (NYSE: USG), Weyerhaeuser (NYSE: WY) and Berkshire Hathaway (NYSE: BRK.B).
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Here are highlights from Thursday's Analyst Blog:
Used Home Sales Down, Inventories Up
In April, Existing Home Sales ran at a seasonally adjusted annual rate of 5.05 million. That pace is 0.8% lower than in March, and 12.9% below the year-ago rate. The year-ago numbers were somewhat inflated due to the end of the homebuyer tax credit.
The April sales rate was below consensus expectations of a 5.23 million annual rate. March was revised down from an initial read of 5.10 million, to 5.09 million.
By Type of Home
Sales of single family homes fell by 0.5% on the month to a rate of 4.42 million, and are off 12.6% year over year. The median price of a single family home nationwide slipped 5.4% from a year ago to $163,200.
Condo and co-op sales fell 3.1% on the month, and are down 15.0% year over year. The median Condo price fell 2.3% from a year ago to $167.3.
For all existing homes, the median price was down 5.0% to $163,700. Some of the weakness in median price from a year ago is due to an increase in distressed sales (mostly former foreclosures and short sales). They fell to 37% of the total in April from 40% in March, but up from 33% a year ago.
Despite mortgage rates staying very low -- averaging 4.84% in April -- unchanged from March and down from 5.10% a year ago, the proportion of people buying homes for cash has been increasing. In April, 31% of all buyers simply wrote a check, rather than getting a mortgage, down from a record 35% in March, but up from 26% a year ago.
By Region
Regionally sales were down on the month in three of the four census regions. The Midwest was the exception, with a 5.7% rise for the month but a 16.4% decline from a year ago. The Northeast had the biggest month-to-month decrease, with sales falling 7.5% and 32.1% from a year ago. In the West, sales fell 1.6% for the month and are down 0.8% year over year. The South, the largest of the four regions, saw a 1.0% decline on the month, and a 9.3% year over year decline.
We saw lower median prices in all four regions. Those ranged from a 4.1% decline in the South to a 7.3% plunge in the Northeast relative to a year ago. While the median price is not the best measure of housing prices over time (changes in the mix of houses being sold can be a significant influence), the price declines are in line with (OK, a bit worse, but consistent with) the data we have seen from better home price series like the Case Schiller index.
The level of activity in used home sales really is not that important in isolation. It is just the transfer of an existing asset, and does not add a lot to economic growth. The one exception to that is Realtor's commissions. Indirectly, it can help as people will often remodel and redecorate a "new for them" house. That can stimulate some sales for paint companies like Sherwin Williams (NYSE: SHW) and perhaps it is good for furniture firms like La-Z-Boy (NYSE: LZB), but it pales compared to the economic activity generated by a new home sale.
New homes not only need new paint on the walls, but they need the walls. That means lots of business for wallboard firms like USG (NYSE: USG), timber firms like Weyerhaeuser (NYSE: WY) and roofing and insulation firms like the Johns Manville division of Berkshire Hathaway (NYSE: BRK.B). It also means that those firms have to hire more workers, so the employment effect of new home sales goes well beyond the roofers and carpenters actually on the jobsite.
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