Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Existing Home Sales Rose 0.6% in April to an Annual Rate of 4.97 Million Units
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post

 
Implications: Existing home sales rose slightly in April and reached the highest sales pace since November 2009, when sales were artificially boosted by an $8,000 homebuyer tax credit. Sales appear to have leveled off over the past several months but are still up 9.7% from a year ago. We expect sales to renew an upward push over the next few months. The months' supply of existing homes (how long it would take to sell the entire inventory at the current selling rate) rose to 5.2 in April. However, this is no cause for worry and may even be more of a good sign as low inventories have probably been holding back the sales pace. Just a year ago, the months' supply was 6.6 and was 9.3 two years ago, so a supply of 5.2 months is still relatively low. What we are probably seeing lately is some more marginal sellers coming back into the market as pricing power recovers. The 11% gain in median prices versus a year ago can be attributed to a couple of factors. First, low inventories while demand is picking up. Second, fewer distressed sales and more sales of larger homes. Homes priced from $0-$100,000 were down 9.8% from a year ago while $1,000,000+ homes are up 41.9%. In general, it still remains tougher than normal to buy a home. Despite record low mortgage rates, home buyers face very tight credit conditions. Tight credit conditions would also explain why all-cash transactions accounted for 32% of purchases in April versus a traditional share of about 10%. Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it's a great time to buy.

Click here for a PDF version
Posted on Wednesday, May 22, 2013 @ 11:10 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.