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The NAR reports Existing-Home Sales Drop 0.5% in April.

Key Highlights

• Existing-home sales slid 0.5% in April to a seasonally adjusted annual rate of 4.00 million.
• Sales are down 2.0% from one year ago.
• The median existing-home sales price rose 1.8% from April 2024 to $414,000, an all-time high for the month of April and the 22nd consecutive month of year-over-year price increases.
• The inventory of unsold existing homes bounced 9.0% from the previous month to 1.45 million at the end of April, or the equivalent of 4.4 months’ supply at the current monthly sales pace.
• Sales are down 36.9 percent from the cycle high of 6.34 million in January of 2022.

NAR Chief Economist, Lawrence Yun, notes “Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy. Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.”

There is no “pent up demand” at these prices.

Factor in mortgage rates, now back above 7 percent, the highest in three months, a slowing economy, and massive tariff uncertainty. Housing is going nowhere until prices collapse and mortgage rates come down.

Yun cannot say that, so he sings the same happy tune for years.

Existing-Home Sales Percent Change from Month Ago

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There has been a cyclical peak in sales in February for three straight years.

This is a sign of faulty seasonal adjustments.

Existing-Home Sales Percent Change from Year Ago

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Year-over-year comparisons are now pretty easy so we may see more meanderings above the zero line if sales hold at these levels and especially if they advance.

Existing-Home Sales Supply

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This is the critical chart.

First notice the obvious seasonal patterns. Whereas the monthly surge of sales suggests poor seasonal adjustments, this chart screams poor seasonal adjustments.

Regardless, the increase in supply is obvious. And if the pattern holds we are going to see supply surge over 5 months later this year.

Stagnant sales coupled with rising supply should start impacting prices to the downside.

But to approach affordability we need to see prices drop by at least a third accompanied by lower mortgage rates too.

Q: Will the bond market accommodate that need?
A: Not if we are headed for stagflation.

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The yield on the long bond and the 10-year Treasury surged today on deficit concerns.

The fundamentals and the technical charts are singing the same tune.

Q: What Tune Is That?
A: Stagflation accompanied by a weakening US dollar

Note: The House passed the One Big Beautiful Bill today. It’s worse than the above. I will comment on that shortly.

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