Existing Home Sales courtesy of the National Association of Realtors via the St. Louis Fed

The National Association of Realtors^® reports Existing-Home Sales Faded 3.4% in April

Key Highlights

• Existing-home sales receded 3.4% in April to a seasonally adjusted annual rate of 4.28 million. 
• Sales fell 23.2% from one year ago.
• The median existing-home sales price slipped 1.7% from one year ago to $388,800.
• The inventory of unsold existing homes increased 7.2% from the previous month to 1.04 million at the end of April, or the equivalent of 2.9 months' supply at the current monthly sales pace.
• All-cash sales accounted for 28% of transactions in April, up from 27% in March and 26% the previous year.
• Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, identical to March and one year ago.

Existing Home Sales Seasonally Adjusted 

Existing Home Sales courtesy of the National Association of Realtors via the St. Louis Fed

Existing Home Sales Supply

Existing Home Sales courtesy of the National Association of Realtors via the St. Louis Fed

Existing Home Sales Long Term

Chart courtesy of Trading Economics, annotations by Mish

Transaction Crash

Existing home sales have crashed to a level seen in the mid 1990s. Prices have not crashed but transactions have.

People who want to move are effectively trapped in their houses because they do not want to trade a sub-3% mortgage for a 6.5% mortgage.

The bidding wars we do see are from people who are price insensitive. They make for amusing anecdotes but the above chart shows the real picture.

This crash is likely to last longer because intertest rates are likely to stay higher for longer because the Fed fears stoking more inflation.

Home sales mean appliance sales, new furniture, cabinets, new carpet, landscaping, etc. Who doesn't spend a lot more money when they move into a new home?

Mortgage Rate

The current average mortgage rate according to Mortgage News Daily is 6.70%.

That is not a rate that will encourage buying. 

Case Shiller Home Price Index

Case-Shiller data from St. Louis Fed, chart by Mish

Case-Shiller Home Prices Unexpectedly Rise Adding Interest Rate Pressure on the Fed

On April 26, I commented Case-Shiller Home Prices Unexpectedly Rise Adding Interest Rate Pressure on the Fed

Case-Shiller Index Chart Notes

• Home prices temporarily halted their slide in February
• The 20-city seasonally-adjusted price rose 0.1 percent
• The 20-city unadjusted price rose 0.2 percent
• Year-over-year the 20-city unadjusted price rose 0.4 percent, down from 2.6 percent

Percent Decline From Peak

Case-Shiller data from St. Louis Fed, chart and calculations by Mish

Financial Stress

Note that 70 Percent of Americans are Financially Stressed, 58 Percent Live Paycheck to Paycheck

The naïve view is that housing cannot crash unless prices crash. The reality is transactions have crashed, and weak home sales portend a weak economy for a long time.

Fed Chair Jerome Powell has admitted as much.

More By This Author:

Still A Near Record Number Of Housing Units Under Construction
Housing Starts Rise 2.2 Percent in April But From Steep Negative Revisions To March
Retail Sales Rise In April But Price Inflation Accounts For All Of The Increase