April 2014 Existing Home Sales Are Bad No Matter What Sweet Words The NAR Uses

The headlines for existing home sales say that sales improved for the first time this year – but still declined year-over-year. Our analysis shows although sales were better than last month – it still was bad. The three month rolling averages are continuing to decline.

Econintersect Analysis:

• Sales growth accelerated 1.0% month-over-month, down 7.2% year-over-year – sales growth rate trend is decelerating using the 3 month moving average.
• Prices growth decelerated 1.3% month-over-month, Up 3.7% year-over-year – price growth rate trend is decelerating using the 3 month moving average.
• The homes for sale inventory grew significantly this month, but is historically low for Aprils (but higher than inventory levels one year ago).

NAR reported:

• Sales up 1.3% month-over-month, down 6.8% year-over-year.
• Prices up 5.2% year-over-year
• The market expected annualized sales volumes of 4.60 to 4.90 million (consensus 4.69) vs the 4.65 million reported.

November 2013 ended 28 straight months of improving year-over-year home sales volumes (unadjusted data) – and the data this month continued the data contraction year-over-year.

Unadjusted Year-over-Year Change in Existing Home Sales Volumes (blue line) – 3 Month Rolling Average (red line)

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The graph below presents unadjusted home sales volumes.

Unadjusted Monthly Home Sales Volumes

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Here are the headline words from the NAR analysts:

Lawrence Yun, NAR chief economist, expected the improvement. “Some growth was inevitable after sub-par housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point,” he said. “Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year.”

“We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas. More inventory and increased new-home construction will help to foster healthy market conditions,” Yun added.

NAR President Steve Brown said there was some heating of the market last month. “The typical time on market shrunk in April, with four out of 10 homes selling in less than a month,” he said. “Homes that show well and are properly priced tend to sell the fastest. More housing inventory gives buyers better choices, and takes the pressure off of the buying process, which is a welcome sign, especially for first-time buyers.”