The National Association of Realtors reported today that, despite falling mortgage interest rates, the seasonally-adjusted annualized rate of sales of previously-owned homes fell from 4.15 million to 4.07 million between September and October -- a drop of 1.9%. This was the first monthly decline in six months.

Analysts were surprised at the announcement. They were expecting a rate of 4.14 million.

All regions of the country reported monthly drops. The loss in the south was greater than in other parts of the country.

In last month's article I suggested that existing home sales be regarded as a barometer of the economic state of mind of those consumers who can afford to buy homes. I postulated that the rate of turnover of existing housing was indicative of the level of confidence -- the willingness to take a chance and make a change -- of the home buying public. Well, if this is the case, then the sales rate of existing homes during October is sounding a note of caution. Could it be that the general economic slowdown is now manifesting itself in the housing market?

We might have had a look at another facet of the housing market if the October housing starts and building permits report had not fallen victim to the government shutdown the week before last. This report was due out on November 17. I searched the appropriate government department internet sites today and all I could come up with was the September report. This is the only major economic report from the shutdown period that has not been released.

Byline: Lafferty (MF Merlin)