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 Declined 9.7% in May
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post

 

Implications:    Existing home sales fell again in May, dropping for a third consecutive month as social distancing and government-mandated lockdowns continued to weigh on sales activity. Sales are now down 26.6% from a year ago, the largest annual decline since 2007, as the housing crisis was beginning to unfold.  Regarding the negative headline number, it's important to remember that existing home sales are counted at closing, and that May sales largely reflect contracts that were signed in March and April, during the height of pandemic-related lockdowns nationwide. That means May was likely a cyclical low point, and sales should begin a rebound starting in June.  Notably, buyers have been signaling a preference for more personal space, avoiding dense urban areas in response to the pandemic. Since February, the last full month before the pandemic erupted, sales of condos/coops are down 43.3% while sales of single-family units are down 30.8%.  Going forward, sales still face a headwind from a low inventory of existing homes, as fewer potential sellers have been listing their properties due to anticipated pandemic-related weakness in the market.  Inventories in May were down 18.8% versus a year ago (the best measure for inventories given the seasonality of the data), though that was a slight improvement versus the year-over-year decline of 20.2% in April.  The good news is that demand for existing homes remained strong enough that 58% of homes sold in May were on the market for less than a month.  It's not hard to see why some buyers have stuck around despite the pandemic, with median price growth decelerating from an annual rate of 8.1% in February (pre-pandemic) to 2.3% in May; good deals abound for those who are willing to look.  The coming months will continue to offer us a murky picture of the housing market, but we expect a rebound in activity as state reopening's bring people back to work, and life starts to look a little more "normal."

Click here  for PDF version

Posted on Monday, June 22, 2020 @ 12:39 PM • 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.