• 266 days Could Crypto Overtake Traditional Investment?
  • 271 days Americans Still Quitting Jobs At Record Pace
  • 273 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 276 days Is The Dollar Too Strong?
  • 276 days Big Tech Disappoints Investors on Earnings Calls
  • 277 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 279 days China Is Quietly Trying To Distance Itself From Russia
  • 279 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 283 days Crypto Investors Won Big In 2021
  • 283 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 284 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 286 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 287 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 290 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 291 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 291 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 293 days Are NFTs About To Take Over Gaming?
  • 294 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 297 days What’s Causing Inflation In The United States?
  • 298 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Existing Home Sales Rise 5.1% From February's Revised -7.3% Plunge

Existing home sales bounced 5.1% from February's steep decline of 7.3%, originally reported as -7.1%.

Sales came in at a 5.330 million seasonally adjusted annualized rate (SAAR), better than the Bloomberg Econoday consensus estimate of 5.286 million.

Highlights

Existing home sales rose more than expected in March, up 5.1 percent to a 5.330 million annualized rate that, however, fails to reverse a downwardly revised 7.3 percent drop in February. And the year-on-year rate, at only 1.5 percent, is decidedly weak. But looking at the first quarter as a whole, which is important for housing data given their volatility, existing home sales are up a much more respectable 4.8 percent.

March's gain is led by the most important component, single-family homes where the rate rose 5.5 percent in the month to 4.760 million. Year-on-year, single-family homes are up 2.6 percent. The showing for condos is less convincing, up only 1.8 percent in the month for a year-on-year decline of 6.6 percent.

Prices in this report are up, a monthly 5.0 percent for the median for a year-on-year rate of plus 5.7 percent which closely tracks rates in FHFA and Case-Shiller data. The median price for an existing home is $222,700 which, outside of last year's Spring selling season when the median peaked above $230,000, is the best of the recovery.

Higher prices help pull in more homes into the market, at 1.980 million in March for a sharp 5.9 percent gain from February. Yet year-on-year, supply is still weak, down 1.5 percent. Looking at supply relative to sales, supply is at 4.5 months which is up slightly from 4.4 months in February and down slightly from 4.6 months in March last year.

Regional data are very positive with all four regions showing monthly gains led by the Northeast at an 11.1 percent surge. The Northeast also leads the year-on-year rates at plus 7.7 percent with the West bringing up rear at a 2.5 percent decline.

Realtors are generally upbeat right now and the housing market, though not on fire with weakness still appearing on the new home side, could be poised for a solid Spring season, one that would contribute to a needed pickup in the pace of the overall economy.

Recent History

A 3.7 percent March surge is expected for existing home sales which however plunged 7.1 percent in a February drop that the usually upbeat National Association of Realtors underscored as meaningful. The strength of the jobs market has yet to be reflected in home sales, the result in part of low wage growth. Low supply and only marginal price appreciation have long been negatives in this report.


Housing Flatlining

Yesterday we noted Housing Starts Plunge 8.8%, Permits Plunge 7.7%; Bloomberg Cites "Fundamental Strength".

Bloomberg's alleged "fundamental strength" strength was based on easy year-over-year comparisons that will vanish next month.


Housing Starts 2004-2016

Housing Starts


Changing Attitudes Explains Housing

Today Bloomberg says "The strength of the jobs market has yet to be reflected in home sales."

Some of us question the alleged "jobs strength". People working multiple part-time jobs does not a strong jobs market make.

That said, the real key to the weak rebound in home sales is changing attitudes. Millennials have different attitudes towards debt, housing, and family formation than the baby boomer generation.

The millennials appreciate mobility and flexibility much more than boomers.

Factor in massive amounts of student debt and the fact that unprecedented numbers of children in their late 20s or even 30s still live at home (some need to take care of elderly parents, others cannot afford a house), and one should not expect robust home sales or a huge surge in family formations.

 

Back to homepage

Leave a comment

Leave a comment