Economic Data is Weakening on Four Fronts

Add Existing Home Sales to the List of Missed Expectations
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Existing Home Sales Decline 3rd Month

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

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

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