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

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.