Existing Home Sales Tumble For 4th Straight Month To Lowest In A Year

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by Tyler Durden
Tuesday, Jun 22, 2021 - 10:05 AM

After April's ugliness, today's Existing Home Sales data for May is the first chance to see signs of recovery in the housing market as state reopenings accelerate. Analysts, however, were not buying it, expecting a 2.1% MoM drop in the key data point, but the data did better than expected, dropping 'only' 0.9% MoM. That is the 4th straight month of existing home sales declines...

Source: Bloomberg

That is the weakest sales print since June 2020...

Source: Bloomberg

Home prices will likely remain elevated for some time as builders struggle to replace the deficit in existing homes with new builds. They cite high materials prices, supply shortages and a limited number of skilled workers as ongoing challenges.

The median selling price rose 23.6% from a year ago to a record $350,300 in May.

And the biggest jump in sales is occurring in the most expensive homes...

“Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market,” Lawrence Yun, NAR’s chief economist, said in a statement.

On average, properties remained on the market for a 17 days in May, matching an all-time low. Eighty-nine percent of the homes sold last month were on the market for less than a month, the NAR said.

“If prices were to decline, there’s an army of potential homebuyers seeing it as a second-chance opportunity,” Yun said on a call with reporters.

None of this should come as a surprise given the total collapse in homebuyer sentiment (and when did homebuilder sentiment actually count for anything?)...

Source: Bloomberg

With The Fed 'talking about, talking about' tapering and raising rates (at some point in the future), mortgage rates are already starting to rise...

Source: Bloomberg

Get back to work Mr.Powell.