The Bloomberg Econoday consensus was for sales to rise 1.2%. Instead they fell 2.7%.
That follows a 3.7% decline last month.
Existing Home Sales Highlights
- Existing-home sales are down 2.7% to 5.85 million, the third straight month of decline.
- Year-to-date – months January to April – sales are still up 20%.
- The median existing-home sales price rose to 19.1% year-over-year to $341,600, both record highs.
Highlights from the National Association of Realtors.
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand. We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their home,” said Lawrence Yun, the NAR’s chief economist.
Inventory, Demand, and Price
Despite the decline, sales are still above pre-Covid levels.
With that in mind, Yun’s speculation about inventory and Covid makes little sense.
Did Covid only impact sellers and not buyers?
Sales surged despite Covid but supply is down because of Covid makes little sense.
Regardless, there is plenty of demand, but not for these prices. Unless there is a sudden inventory of houses people deem affordable, don’t expect a surge of buyers.
Home sales are hugely up from a year ago but that is vs Covid bottoms. Year-over-year comparisons are getting more difficult as time goes on.
Weakening Data
- Existing Home Sales, May 21: This report
- Housing Starts, May 18: Housing Starts Increasingly Volatile, Way Lower Than Expected in April
- Retail Sales, May 14: Hot Potato Money in Play as Retail Sales Unexpectedly Flop
- Jobs, May 7: Huge Jobs Disappointment 732,000 Under Consensus With Big Negative Revisions Too
Stimulus Where Art Thou?
This weakening is despite three massive rounds of stimulus and unemployment insurance that in many instances pays more to be unemployed than employed.
Weakening does not necessarily mean weak, but is this all we get from Congressional stimulus and cheap rates from the Fed?
Do we need another stimulus package already to keep things humming?
Mish
More than half of parents with children under 18 have altered their work schedule to take care of their children, a separate Bankrate survey found. “Monthly child-care costs can feel like an extra mortgage payment, especially if you live in an expensive area or have more than one kid,” said Ted Rossman, a senior industry analyst at Bankrate.
Still, many employers and lawmakers believe the extra unemployment benefits are the reason some employers can’t fill positions. The $300-a-week benefit is set to expire in early September for Americans. But more than 3.6 million recipients will soon be cut off in 22 Republican-led states that are ending it early.
Once again, however, the reality behind the headlines appears to be more complicated. “[E]ach month in early 2021, about seven out of 28 unemployed individuals receive job offers that they would normally accept, but one of the seven decides to decline the offer due to the availability of the extra $300 per week in UI payments,” economists estimated in https://www.marketwatch.com/story/san-francisco-fed-has-cautionary-words-for-22-states-ending-enhanced-unemployment-benefits-11621546285?mod=article_inline published by the https://www.frbsf.org/economic-research/files/wp2021-13.pdf.
Not everyone is buying that story. “Recovery is in sight for many Colorado businesses,” Chuck Berry, the president of the Colorado Chamber of Commerce, said in a statement, “but the legislature still must confront major policy issues to get our economy back on track.”
IT measures mobility AND economic conditions. In 2008 we saw more problems with economic conditions. In 2021 we are seeing way more mobility issues. People do not want to sell in this environment. Covid has made more people comfortable at home.
I do not see this as a economic indicator at the moment.