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First Cut: Existing home sales in April disappoint expectations, but still about on trend

Sales of existing home slipped 0.4% in April to 5.19 million units (SAAR) as sales of single-family units fell 1.1% to 4.62 million and all multi-units were up 5.6% month-over-month. Compared to a year-ago, total sales were off 4.4% while single-family sales were down 4.0% and multi-units were 8.1% lower. The April reading was a disappointment compared to market expectations, but probably does not presage further lackluster conditions. Consumers are anticipated to move to take advantage of low mortgage interest rates that have been in place in the March through May period.

It may be that it has taken a little time to once more build up steam in the housing market after the slowdown in the second half of 2018. Supplies of units have been limited, especially in the more sought-after middle-of-the-price-range units. That has been a benefit for those units on the market and helped put prices on a renewed upward trajectory. More inventory and concerns about further price increases should push those consumers who want to buy a home to act sooner rather than later.

Home sales were uneven across regions, however, these seem to be driven more by demand rather than by exogenous factors like weather. The burst of buying activity in the Northeast that greeted the first signs of lower mortgage rates and milder prices late in 2018 and early 2019 appears to have used some pent-up demand for the moment. However, the spring home shopping season should boost sales in coming months. Sales were steady in the Midwest, and only nominally softer in the South at down 0.4%. Sales in the West were up 1.8%, possibly reflecting fresh housing stock coming on the market after being depleted from the wildfires in the fall.

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