Housing Data Show Further Weakness

Existing-home sales in January fell 23% from a year earlier as inventories remained near record highs, indicating further weakness in the U.S. housing market.

The report from the National Association of Realtors came on the same day that home improvement retailer Lowe's(LOW Quote) issued disappointing guidance for 2008 because of the slowing housing market.

The NAR said Monday that existing-home sales totaled an annual rate of 4.9 million units in January, better than the 4.8 million that economists expected. The rate compared with an upwardly revised level of 4.9 million in December and 6.4 million in January 2007.

The national median home price slid 4.6% from a year ago to $201,100.

Total housing inventory rose 5.5% at the end of January to 4.2 million existing homes available for sale. This represents a 10.3-month supply at the current sales pace, up from a 9.7-month supply in December.

Homebuilder stocks were mixed on the report. Hovnanian(HOV Quote) rose 2.1% to $9.61, while Centex(CTX Quote) fell 1.2% to $22.94.

Lowe's shares rose 2.3% to $24.12, after the company reported a 33% drop in profits for the fourth quarter. On a per-share basis, earnings totaled 28 cents, better than the 25 cents that analysts expected, according to Thomson Financial.

For the current year, however, Lowe's said it expects EPS of $1.50 to $1.58 this year, below the $1.74 that analysts were projecting.

"As the year progresses, the recent Federal Reserve interest rate cuts and the approved fiscal stimulus package are expected to lend support to the broader economy and the consumer," Lowe's CEO Robert Niblock said. "As a result, many of the headwinds facing the housing market and the home improvement industry should lessen, and consumers' confidence in investing in and improving their homes should improve."

On Tuesday, the nation's biggest home improvement retailer, Home Depot(HD Quote), will report its fourth-quarter results.