Existing Home Sales Down 4.9%, Resume Slide After February Surge
The NAR reports 5.21 million sales in march at a seasonally-adjusted annualized rate (SAAR).
This follows February's surge to 5.48 million sales which now appears to be a one-hit wonder. The NAR originally reported 5.51 million in February (up 11.8%) now its 5.48 million (up 11.2%).
More importantly, there was no follow-through.
Nonetheless, NAR Spokesman Lawrence Yun brushed it off as an Expected Slide.
“It is not surprising to see a retreat after a powerful surge in sales in the prior month. Still, current sales activity is underperforming in relation to the strength in the jobs markets. The impact of lower mortgage rates has not yet been fully realized,” said cheerleader Yun.
Please, stop the nonsense.
Economists expected sales of 5.30 million, not 5.21 million.
The chart by Calculated Risk (my line in blue added), shows existing home sales are about where they were in January of 2000.
Year-Over-Year Numbers Telling
Year-over-year sales are down 5.4%. In February, sales were down a revised 2.3% year-over-year even with that huge surge.
To brush this off as "expected" is a joke. Neither Yun nor the NAR expected such results.
Total housing inventory at the end of March increased to 1.68 million, up from 1.63 million existing homes available for sale in February and a 2.4% increase from 1.64 million a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.6 months in February and up from 3.6 months in March 2018.
“Further increases in inventory are highly desirable to keep home prices in check,” says Yun.
The Econoday cheerleader had this to say: "A key positive in today's report is strength in selling prices, suggesting that sellers are holding firm to their asking prices. The median rose 3.7 percent in the month to $259,400."
Supposedly It's Always a Good Time to Buy
NAR president John Smaby repeated the expected nonsense: “We’re also seeing very favorable mortgage rates, so now would be a great time for those buyers who may have been waiting to make a purchase.”
The median sales price increase more than wipes out any increase in wages or drop in mortgage rate.
Home prices are not affordable. Period. And attitudes towards ownership, debt, and family formation have all changed.
Mike "Mish" Shedlock