But it's the weather... nope... NAR blames excess inventory as giving people too much choice and slowing their purchasing decisions for the notable miss on both MoM and YoY sales. This is the 7th month in a row of declining YoY sales. The 0.4% rise MoM missed expectations of 1.0% as the pent-up demand from a cold winter appears to be missing in action. Of Course NAR is optimistic (but even they are cautious), "an uptrend in closed sales is expected, although some months will encounter a modest setback."
7th month in a row of YoY declines...
For the longest time the NAR "explained" collapsing pending home sales with the weather. Well, clearly the weather in the west was horrible this year.
And now it's time to gives the mic to everyone's favorite "economist-cum-weatherman", Larry Yun, who if nothing else is always full of hope and horrible forecasts.
Yun projects the 30-year fixed-rate mortgage to trend up and average 5.5 percent next year. “The extent to which higher mortgage interest rates will impact housing affordability and sales depends on income growth, ongoing improvement in the labor market and any change to mortgage underwriting conditions.”
With sub-par activity in the first quarter, annual existing-home sales are expected to be modestly below the nearly 5.1 million in 2013, but should be close to 5.3 million in 2015. The national median existing-home price is projected to grow between 5 and 6 percent this year, and in the range of 4 to 5 percent in 2015.
Lawrence Yun, NAR chief economist, expects a gradual uptrend in home sales. “Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence,” he said. “An uptrend in closed sales is expected, although some months will encounter a modest setback.”
Someone please explain to Larry that higher inventory levels means more supply. We are confident even the NAR knows what more supply does to the equilibrium price.