Importance: *

Definition: Regional report on home resale activity.
 

Related Indicators: New Home Sales, Housing Completions, Construction Spending, Housing Starts, Building Permits

Source: National Association of Realtors.

Frequency: Monthly

Availability: About 25 days after the relevant month

Direction: Pro-cyclical

Timing: Coincident

Volatility: Modest
 
Likely Impact of Financial Markets:

                    Interest Rates: Modest. Unexpected increase may signal high economic activity and lead to higher rates.

                    Stock Prices: Ambiguous

                    Exchange Rates: Small

Ability to Affect Markets: Modest

Analysis of the Indicator:
 
Latest Report for November 1997:

Low interest rates and sustained economic activity helped sales of existing-homes record
another strong month, according to the National Association of Realtors.

The association recorded a seasonally adjusted annual sales rate* of 4.38 million existing single-family homes nationwide in
November 1997, down 0.2 percent from the revised October rate of 4.39 million units, but up 7.9 percent from the pace for
November 1996. October's numbers set an all-time high for monthly sales of existing-homes. The previous high of 4.31
million unit sales was recorded in August and September.

NAR President R. Layne Morrill said the slight drop in home sales was inevitable. "Up until November, we had three
consecutive phenomenal months," he said. "It was a matter of time before we saw some downward trend, however slight.
Given the cyclical nature of the market we expect a continued slowdown in the coming months though nothing dramatic," he
added.

The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional,
fixed-rate mortgages was 7.21 percent in November. This rate was down from 7.29 percent posted in October and the 7.62
percent in November 1996. The last time mortgage interest rates were this low was February 1996, when the average
commitment rate was 7.08 percent.

NAR consulting economist John A. Tuccillo said interest rates are low because investors are jumping into the bond markets.
"The volatility recently experienced in Asian stock markets scared a lot of people," said Tuccillo. "This prompted investors to
put their money in a nice, safe place -- namely, the U.S. Treasury. One of the safest vehicles for investment is a Treasury
bond," he noted.

The national median price for an existing-home was $124,400 in November, up 6.0 percent from the November 1996 price of
$117,400. The median is a midpoint -- half the homes sell for more, half for less.

The slight slowdown in home resales was felt nationwide in November. The South was the only region to experience an
increase, with sales of existing-homes rising 1.8 percent to 1.67 million units from October and surging 12.8 percent from
November 1996. The median price for a home in the South during November was $108,700, up 6.2 percent from the same
time last year.

The West matched sales of existing-homes from October to November with a rate of 990,000 units. This pace was up 7.6
percent from November 1996. The median price in that region was $161,700, up 6.5 percent from a year ago.

In the Northeast, home sales dipped 1.6 percent from October to 630,000 units. However, this compares with a 5.0 percent
increase from November 1996. The median home price in the Northeast rose 7.4 percent from November 1996 to $146,000.

Month-to-month sales of existing-homes in the Midwest decreased 2.7 percent in November to 1.09 million units, but
increased 2.8 percent from the same time last year. The Midwest's median price was $106,800 in November, up 7.6 percent
from November 1996.

The National Association of Realtors, "The Voice for Real Estate," is the nation's largest professional association,
representing 720,000 members involved in all aspects of the real estate industry.

* The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative
pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting
monthly data to factor out seasonal variations in resale activity.
 

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An analysis of the November 1997 reprt from First Union