US existing home sales rise

Those looking for a bottom in housing in the US probably had their hopes raised yesterday. From Reuters:

The National Association of Realtors on Monday said sales of previously owned homes rose 2.9 percent in February to a 5.03 million-unit annual rate, bucking expectations on Wall Street for a decrease.

But falling prices probably had something to do with the improvement.

While the rise broke a six-month streak of declining sales, prices continued to slip. The trade group said median prices fell 8.2 percent from their year-ago level to $195,900. It was the biggest year-on-year drop on record dating to 1968.

And inventory remains high.

The pick-up in existing home sales helped cut into the bloated inventory of unsold homes on the market. NAR said the inventory fell 3 percent to 4.03 million units at the end of February. At February's sales pace that represented a 9.6 months' supply, the slimmest inventory since August but still high by historical standards.

Meanwhile, we continue to get more recession calls.

In a separate report, the Chicago Federal Reserve Bank said its index of U.S. economic activity slipped to -1.04 in February, the lowest since April 2003. The drop pushed a three-month average of the index deeper into territory that can signal recession.

"There is an increasing likelihood that a recession has begun," the Chicago Fed said.

Across the Atlantic, the housing market in the UK is also weakening. House prices are decelerating rapidly as the number of house-buyers fall to a record low according to the National Association of Estate Agents.

However, way to the east in the Land of the Rising Sun come signs of rising land prices. From AFP/CNA:

Residential land prices rose 1.3 percent over the year to January 1 on average, following a 0.1 percent gain through 2006, which was the first rise in 16 years, an annual survey by the land ministry showed.

Commercial land prices rose 3.8 percent on average in 2007, extending a 2.3 percent increase seen the year before.

But the overall Japanese economy is looking shaky. From Reuters:

The business survey index of sentiment at large manufacturers slumped to minus 12.9 for January-March from plus 5.2 in October-December in a joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office...

The survey's index reading at large non-manufacturers fell to minus 7.2 from minus 2.2 last quarter, while that at big firms overall was down at minus 9.3 against plus 0.5 in October-December.