Existing Home Sales Miss; Worst Start To Year Since 2007

After 6 months of missed expectations, last month's fragile beat of dismal expectations (even though it was the worst existing home sales SAAR in 21 months) provided just enough of a glimmer of hope to stoke more short squeezes in homebuilder stocks and strengthen the pillar of the US economic recovery. Now we are in April... the start of the key seasonal selling season... and existing home sales rose modestly MoM (but fell for the 6th month in a row YoY) and missed expectations. There is - simply put - no post-weather bounce.. and still NAR is blaming slow April sales being delayed due to Winter weather! This is the worst start to a year since 2007.

7 of the last 8 months missed expectations


This is the 6th month in a row of slowing year-over-year sales


This is the worst start to a year since 2007...


Some disturbing trends:

  • Existing-home sales in the Northeast are 6.3 percent below April 2013
  • Existing-home sales in the West are 10.0 percent below a year ago
  • Existing-home sales in the Midwest slipped 1.0 percent in April to a pace of 1.03 million, and are 9.6 percent below a year ago
  • Existing-home sales in the South are 3.5 percent below April 2013

The details continue to show that the "normal" housing market continues to disappear, with the bulk of existing housing made simply to serve investors and flipping speculators :

  • 5.9 months supply in April vs. 5.1 in March
  • Inventory rose 16.8% to 2.29m homes
  • 1st-time buyers 29% of total sales; all cash 32%; investors 18%
  • Distressed sales 15% of total sales; of which
  • foreclosures 10%; short sales 5%
  • Median home price rose 5.2% from last year to $201,700

First-time buyers continue to represent fewer than one-third of all buyers at 29 percent in April, down from 30 percent in March; they were 29 percent in April 2013.

All-cash sales comprised 32 percent of transactions in April, compared with 33 percent in March and 32 percent in April 2013. Individual investors, who account for many cash sales, purchased 18 percent of homes in April, up from 17 percent in March; they were 19 percent in April 2013. Seven out of 10 investors paid cash in April.

In short: all hail America's landlord Blackstone!