Existing Home Sales: Downside Miss, Still A Bottoming Process

Bottom Line: Existing home sales fell more than expected in March after rebounding in February from decade-plus lows in January. Supply conditions remain very tight, with months' supply (sales/inventory) holding at just 2.6 months. Supply remains very tight, with homeowners reluctant to move and give up mortgages with rates that are nearly half the prevailing market rate today. And affordability remains an issue for buyers, with mortgage rates still well over 6%. Prices edged slightly higher again as those who can afford to buy appear willing to buy after the modest correction in prices. Overall, housing is in a process of bottoming, especially for new homes. But expect existing home sales to take longer to bottom, given that homeowners with low mortgage rates have little incentive to move.

Existing Home Sales FELL -0.11 million annualized units to 4.44, ABOVE the 3-Month average of 4.33, ABOVE the 6-Month average of 4.26 but -1.25 BELOW the year-ago level. Single-family sales FELL -0.11 million annualized units to 3.99, ABOVE the 3-Month average of 3.89, ABOVE the 6-Month average of 3.82 but -1.07 BELOW the year-ago level.

Median prices nationwide ROSE 12.1k dollars to 375.7, ABOVE the 3-Month average of 366.83, ABOVE the 6-Month average of 369.75, nearly in line with the year-ago level of 379.3.

Inventory ROSE 0.01 million units to 0.98, ABOVE the 3-Month average of 0.98, BELOW the 6-Month average of 1.04 and 0.05 ABOVE the year-ago level.

Months supply were unchanged at 2.6, BELOW the 3-Month average of 2.7, BELOW the 6-Month average of 2.93 but 0.6 ABOVE the year-ago level.