No Signs Of A Bottom In The US Housing Recession From Existing Sales

Source: Daily FX

The FOMC's remarks that there have been few signs that the housing market has bottomed out were given weight with today's existing home sales report. According to the National Association of Realtors report, purchases of previously owned homes slipped 1.0 percent to a 4.89 million annual pace. For a market driver, this data was better than economists forcasts for a 1.6 percent drop to 4.85 million homes; yet this contraction still marks the ninth contraction for the past year and a new low for records gong back to 1999. Looking into the details of the report, the foundation of the market in single family homes was faring just as badly as the headline number would suggest. Single family home sales slipped 0.5 percent to a 4.34 million clip, while supplies surged to a 10.7 months supply from 9.6 months in March. On the other hand, while sales and inventories extend the recession, the ongoing decline in prices brings the market closer to a buyers market. The median price of sales through the month dropped 8.0 percent from last year, though there was a second consecutive increase on a monthly basis. Going forward, existing home sales will be the bellweather for gauging the eventual turn in the housing market as sales of existing homes will preceed a rebound in price and construction activity.