US: Existing Home Sales

Mon Apr 23 09:00:00 CDT 2018

Consensus Consensus Range Actual Previous
Existing Home Sales - Level - SAAR 5.513M 5.390M to 5.800M 5.600M 5.540M
Existing Home Sales - M/M Change 1.1% 3.0%
Existing Home Sales - Yr/Yr Change -1.2% 1.1%

Supply is coming into the market and sales are improving. At the same time, sellers are getting what they're asking. Existing home sales rose 1.1 percent in March to a stronger-than-expected 5.600 million annualized rate. Supply on the market jumped 5.7 percent in the month to 1.670 million units to lift supply relative to sales to 3.6 months from 3.4.

The median price rose 3.9 percent in March to $250,400 which is up 5.8 percent year-on-year and roughly tracking at the FHFA and Case-Shiller rates, in data that will be updated tomorrow.

The West is out front in sales growth though sales in March did dip. The Northeast remains the tail ender.

Though March is solid, resale trends aren't that strong, evidenced by the year-on-year rate which is in the negative column at minus 1.2 percent. Watch for new home sales tomorrow where March strength is also the call.

Market Consensus Before Announcement
At a consensus decline from a 5.540 million annualized rate to a 5.513 rate, existing home sales in March are not expected to extend February's bounce higher. Supply on the market has been well below demand and has been lifting prices and holding down sales.

Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors)

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.

Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic "ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.