Implications: Just when you started to believe the pundits were right and housing would never come back, the data have made a nice turn to the upside. After pulling back in February (by less than first estimated), existing home sales increased to a 5.10 million unit annual pace in March. This is the fourth strong monthly gain in the past five months and existing home sales are now 32.1% above their low of 3.86 million in July 2010. Sales gains were widespread, increasing in most major regions of the country. On the price front, the median price of an existing home rose to $159,600, although prices are still down 5.9% in the past year. The rebound in housing data in the past few days is positive, but does not signal a miraculous return to pre-crisis conditions. There are many positive developments (higher wages, job growth, low interest rates, and great prices), but credit conditions remain tight. So, while we expect the sales of existing homes to climb back to their long-term trend of about 5.5 million units annually, the process will remain volatile.
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