|Existing Home Sales|
Activity in the housing sector caught fire in April with existing home sales up 0.6 percent to an annual rate of 4.97 million. Sales of single-family homes, the most important component in the report, rose 1.2 percent in the month.
Supply, which had been very tight, poured into the market during April with 230,000 units added to lift the months supply to 5.2 from 4.7 months. The median time for a house on the market fell dramatically, to 46 days vs 62 days in March.
And sellers are getting their price based on the report's price data. After jumping 6.2 percent in March, the median price rose another 4.8 percent in April to $192,800 which is the highest level of the recovery. Note that price data in this report, which are not based on repeat transactions, are often volatile. Still, a double digit year-on-year median gain at 11.0 percent is convincing.
Regional data, like they have all year, show little variation with three regions posting low single-digit monthly gains and one a low single-digit dip. But the report notes that a 1.7 monthly sales rise in the West is a notable positive given how low supply is in the region.
Sales of existing homes appear to have hit stride nicely in the opening of Spring. Yet a threat right now, at least for May sales, is that mortgage rates are suddenly on the rise this month and in a big way, making for big and sudden declines in mortgage activity as seen in the weekly MBA Purchase Applications report posted earlier this morning on Econoday.
Market Consensus before announcement
Existing home sales for March came in at a 4.92 million rate, down 0.6 percent from February. The March decline followed gains in January and February of 0.8 percent and 0.2 percent. The latest reading left sales 10.3 percent above year-ago levels. Total supply at the March sales rate was 4.7 months which is up, but only slightly, from 4.6 months in February. Supply in March 2012 was 6.2 months. Only 30,000 units were added to inventory in the month versus an average March increase of 100,000 units. A reduction in distressed properties may be a factor limiting supply.
Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors) Why Investors Care