| Existing Home Sales |
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Released On 6/21/2012 10:00:00 AM For May, 2012
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Prior | Prior Revised | Consensus | Consensus Range | Actual |
| Existing Home Sales - Level - SAAR | 4.62 M | 4.62 M | 4.570 M | 4.460 M to 4.740 M | 4.55 M | | Existing Home Sales - M/M Change | 3.4 % | 3.4 % | | | -1.5 % | | Existing Home Sales - Yr/Yr Change | 10.0 % | | | | 9.6 % |
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Highlights
This year's momentum in the housing sector, what of it there has been, appears to be slowing. Existing home sales fell 1.5 percent in May to a 4.55 million annual rate. The rate opened the year at 4.63 million in January but hasn't gone anywhere. Details show monthly contraction in three of four regions including the South which is by far the largest region.
Good news in the report includes a strong firming in prices to a median $182,600 for a year-on-year gain of 7.9 percent. Supply is also a positive, rising only slightly at the current sales rate to 6.6 months and not showing the usual bloat at this time of year. Distressed properties do not appear to be having a severe effect on the market.
The unseasonably warm weather at the beginning of the year, when sales were at their highest, likely pulled sales into the winter from the spring. Weather aside, sales are flat as housing, despite record low mortgage rates, continues to struggle.
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Market Consensus before announcement
Existing home sales in April posted a 3.4 percent increase, following a 2.8 percent decrease in March. Gains were solid across regions. While the April increase is encouraging, the trend since the first of the year has been flat. April's 4.62 million unit annualized pace is basically back to January's 4.63 figure. Again, the good news is that the dips in February and March (when warm weather should have led to stronger numbers, according to some) are not the trend. However, sales are up 10.0 percent on a year-ago basis (SA), indicating that there is general but modest upward momentum. A statistical negative in the report was a rise in supply, to 6.6 months from 6.3 and 6.2 in the prior two months. But the rise may be due to optimism about modest improvement in the housing market as potential home-sellers added to the inventory level at a monthly 9.5 percent. Still, supply to sales is well down from a year ago when it was at 9.1 months.
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Definition
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
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![[Chart]](showimage.asp?imageid=22726)
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Existing home sales reached a peak in mid-2005 and have been easing since. Typically, a distinct reverse relationship exists between home sales and mortgage rates. However, sales and mortgage rates both have firmed in recent months.
Data Source: Haver Analytics
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