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.

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