Existing Home Sales skid to pre-pandemic level, a housing bust is underway

Mike “Mish” Shedlock's Sitka Pacific Capital Management,Llc

Existing home sale declined for the third month. It's just a start of what's coming.

Existing home sales courtesy of trading economics, annotations by Mish

The National Association of Realtors reports Existing-Home Sales Retract 2.4% in April

Report highlights

Existing-home sales fell for the third straight month to a seasonally adjusted annual rate of 5.61 million.
Sales were down 2.4% from the prior month and 5.9% from one year ago.
With slower demand, the inventory of unsold existing homes climbed to 1.03 million by the end of April, or the equivalent of 2.2 months of the monthly sales pace.\
The median existing-home sales price increased at a slower year-over-year pace of 14.8% to $391,200.
All-cash sales accounted for 26% of transactions in April, down from 28% in March and up from the 25% recorded in April 2021.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, down from 18% in March and equal to 17% in April 2021.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.98% in April, up from 4.17% in March. The average commitment rate(link is external) across all of 2021 was 2.96%.

"The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago," said NAR chief economist Lawrence Yun.

The NAR's PowerPoint Presentation has many interesting charts worth a review.

Median price of existing Home Sales

Percent change of existing Home Sales by price range

Year-over-year percent change of existing Home Sales

Key chart ideas

Year-over-year sales are down 9 consecutive months.
Sales of homes over $500,000 are up, below $500,000 down
The median price of sales continues to rise

Econoday consensus

Amusing economists

Economists are more than a bit amusing. One predicted a 4 percent rise in sales. What was that person's thought process?

Prices are still rising (for now).

But with mortgage rates up over two percentage points, this bust is just getting started.

Author

Mike “Mish” Shedlock's

Sitka Pacific Capital Management,Llc

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold reclaims $5,000 and above

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs just above the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.