Existing Home Sales: Better Start to Spring/Summer Selling Season
June 21, 2019
Bottom Line: Existing home sales rose a bit more than expected after a very slow winter. There were also slight upward revisions to prior data, helping the overall trend to show some signs of stabilization amid lower mortgage rates. Slowing since late '17 until plunging to near cycle lows in January, sales are now showing signs of improvement. Sales over the last three months averaged 5.25 million units annualized, considerably above the six-month average and even slightly above the 12-month average. While housing bears careful watching as we get more data on the summer selling season, so far the market looks to have stabilized and might even be showing early hints of improvement after 2018's sharp retrenchment. Existing Home Sales ROSE by 2.5% in May to 5.34 million, compared with market expectations for an increase to 5.30 million. The prior month was revised up from 5.19 to 5.21 million. Home re-sales are now 1.1% BELOW their year ago level and are 26.3% BELOW their September 2005 record high. The Inventory of Homes Available for Sale ROSE by 4.9% to 1,920k and are now 2.7% ABOVE their year ago level. Because inventories increased while sales increased, the Months Supply ROSE to 4.3 months from 4.2 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and even BELOW the 6 month level that is considered 'normal'. Home Prices ROSE compared to their year ago levels. Average home prices are 3.4% ABOVE their year ago levels while median home prices are 4.8% ABOVE their year ago levels.
Article by Contingent Macro Advisors