The headlines for existing home sales say that sales growth fell marginally in March month-over-month – and declined year-over-year. Our analysis shows a larger deterioration. The three month rolling averages are continuing to decline.
Econintersect Analysis:
- Sales growth decelerated 1.3% month-over-month, down 8.5% year-over-year – sales growth rate trend is decelerating using the 3 month moving average.
- Prices growth decelerated 1.3% month-over-month, Up 5.9% year-over-year – price growth rate trend is decelerating marginally using the 3 month moving average.
- The homes for sale inventory grew marginally this month, but is historically low for Marchs (but higher than inventory levels one year ago).
NAR reported:
- Sales down 0.2% month-over-month, down 7.5% year-over-year.
- Prices up 7.9% year-over-year
- The market expected annualized sales volumes of 4.45 to 4.90 million (consensus 4.56) vs the 4.59 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 deterioration.
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, said that current sales activity is underperforming by historical standards. “There really should be stronger levels of home sales given our population growth,†he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.†Yun expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.â€
NAR President Steve Brown said first-time buyers have been stuck in a rut. “There are indications that the stringent mortgage underwriting standards are beginning to ease a bit, particularly regarding credit score requirements, but they remain a headwind for entry-level and single-income home buyers. We also have tight inventory in the lower price ranges where many starter homes are found, but rising new-home construction means some owners will be trading up and more existing homes will be added to the inventory. Hopefully, this will create more opportunities for first-time buyers.
