Existing home sales fall to 4.14M
- Prior month 4.19M revised to 4.22M
- Existing home sales for April 4.14M versus 4.21M estimate. Weaker than expectations
- Existing home sales are down -1.9% on the month
- month supply 3.5 months versus 3.2 months last month
- 30-year mortgage rate 7.05%
- Supply of home price over $1 million up 40% year-over-year
- Median home price $407,600 up 5.7%. Record high
- First-time buyers 33% versus 29% last year
- All cash sales 28%
Sales are based on closing.
I don't know how to get out of the housing dilemma.
- Supply and demand is out of balance with not enough housing.
- That has prices higher.
- Higher prices has existing home owners feeling confident to spend which keeps rates higher. That is a brake for homebuilder who have high carry costs.
- Home owners are locked in lower rates which keeps them locked in their houses.
- New home buyers are left with higher rates and higher prices. Affordability is skyhigh for them.
If home prices come down sharply, it would likely push the US into recession as consumers turn off the spending spigot, but it is what needs to happen if a new generation of homebuyers is to enter the market.
US stocks are little changed across the board after the existing home sales report:
- Dow Industrial Average average -0.03%
- S&P index -0.01%
- NASDAQ index +0.08%.