CHART OF THE DAY: The "Distressing" Gap Between New And Existing Home Sales

button more charts
button chart prev
button chart next

This morning’s existing home sales number showed that sales surged in October by a surprising 10.1%. But new home sales continue to remain quite weak.

Today’s chart, showing the “distressing” gap between the two measures, comes courtesy of Calculated Risk, which explains:

The initial gap was caused by the flood of distressed sales. This kept existing home sales elevated, and depressed new home sales since builders couldn’t compete with the low prices of all the foreclosed properties.

The recent spike in existing home sales was due primarily to the first time homebuyer tax credit.

But what matters for the economy – and jobs – is new home sales, and new home sales are still very low because of huge overhang of existing home inventory and rental properties.

Get This Delivered To Your Inbox
You can get this dropped in your inbox every afternoon as The Chart Of The Day. It’s simple. It’s convenient. It’s free. All we need is your email address (though we’d love your name and state, too, if you’re willing to share it).  Sign up below!

Email State First Name Last Name

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.