Existing Home Sales: Further Declines Less Than Expected

Bottom Line: After hitting a cycle high of 5.77 million annualized units in February, existing-home sales continued a sharp decline for the second consecutive month amid shutdowns for the novel coronavirus. However, the inventory of homes for sale fell only slightly, bringing the months' supply to just over 4, still below historical averages. Distressed sales remained low and in-line with levels seen at the same time last year. Moreover, the median and average sales prices rose slightly, suggesting that where activity was occurring, markets remained firm. Overall, the report suggests housing demand remained moderate with tight supply conditions. This sector of the economy continues to look like a potential leader in the recovery. Existing Home Sales FELL by 17.8% in April to 4.33 million, compared with market expectations for a decline to 4.22 million. There were no revisions to prior data. Home re-sales are now 17.2% BELOW their year-ago level and are 40.3% BELOW their September 2005 record high. The Inventory of Homes Available for Sale FELL by 1.3% to 1,470k and are now 19.7% BELOW their year-ago level. Because inventories declined while sales declined, the Months Supply ROSE to 4.1 months from 3.4 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 5.4% ABOVE their year-ago levels while median home prices are 7.4% ABOVE their year-ago levels.