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US DATA: Existing Home Sales Remain In Stasis

US DATA
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Existing home sales picked up a little more than expected in December to 4.24mln SAAR (4.20mln expected, 4.15mln prior), for  a 10-month high. 

  • While the overall volumes of existing home sales remain depressed by historic standards, they at least continue to show signs of bottoming out: the 9.3% Y/Y rise  in sales was the largest such gain since June 2021, while the median existing home sales price rose 6% Y/Y $404,400.
  • But at the same time, inventories dropped 13.5% M/M to 1.15mln, leaving the ratio of sales/inventory at 3.3 - a 9-month low and well off from the recent high of 4.3 in September.
  • As such the existing home market can't really be characterized as tight or loose: it's in a period of stasis as buyers and sellers paralyzed by high mortgage rates and residential real estate prices.
  • Indeed, what activity there is appears largely underpinned by better-heeled buyers who are less interest-rate sensitive, with cash remaining king: the NAR, cash sales accounted for 28% of transactions in December (near historic highs), while sales were up 35% Y/Y for homes priced at over $1mln but fell for those below $250k.
  • While further improvement in home sales is plausible from such weak levels, there's unlikely to be any renewed dynamism unless interest rates fall substantially or unemployment picks up.

 

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Existing home sales picked up a little more than expected in December to 4.24mln SAAR (4.20mln expected, 4.15mln prior), for  a 10-month high. 

  • While the overall volumes of existing home sales remain depressed by historic standards, they at least continue to show signs of bottoming out: the 9.3% Y/Y rise  in sales was the largest such gain since June 2021, while the median existing home sales price rose 6% Y/Y $404,400.
  • But at the same time, inventories dropped 13.5% M/M to 1.15mln, leaving the ratio of sales/inventory at 3.3 - a 9-month low and well off from the recent high of 4.3 in September.
  • As such the existing home market can't really be characterized as tight or loose: it's in a period of stasis as buyers and sellers paralyzed by high mortgage rates and residential real estate prices.
  • Indeed, what activity there is appears largely underpinned by better-heeled buyers who are less interest-rate sensitive, with cash remaining king: the NAR, cash sales accounted for 28% of transactions in December (near historic highs), while sales were up 35% Y/Y for homes priced at over $1mln but fell for those below $250k.
  • While further improvement in home sales is plausible from such weak levels, there's unlikely to be any renewed dynamism unless interest rates fall substantially or unemployment picks up.

 

Keep reading...Show less