Friday brought another below-consensus read on the US housing market.
Existing home sales dropped 2.7% in April, to a 5.85 million annual pace, below the 6.07 million the market expected. The range of forecasts was 5.7 million to 6.35 million. March was unrevised.
This marks the third consecutive monthly decline (figure below).
This is another situation where myriad pandemic distortions make it virtually impossible to get a clean read on… well, on anything, really.
Prices have soared, presenting a problem for would-be buyers, even as demand remains insatiable. The median existing home sales price rose a record 19% in April to a record $341,600. So, that’s two records in one sentence.
Lawrence Yun, NAR’s chief economist, blamed April’s decline on the supply/demand imbalance, but he also cited fears of contracting the virus.
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” Yun remarked. “We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” he went on to say.
Yun stated the obvious: Demand is “still strong.” If supply ever catches up, “the torrid pace of price appreciation” will abate, he added, suggesting things might begin to normalize “later in the year.”
Earlier this week, housing starts missed estimates, and some of the analyst commentary around Home Depot’s blowout comps performance last quarter suggested some believe the US housing market may have peaked.
And yet, as the NAR noted Friday, inventory levels for existing homes remain close to record lows.
Last month, the typical property sat on the market for just 17 days.
