Existing Home Sales Fall to a Four Year Low in May/ Supply at 15 Year High

As expected, existing home sales fell -.3% MoM, to a new low for this housing slump. In addition, inventory rose 6% MoM, to 8.9 months of supply at the current sales pace, and a 15 year high. Median sales prices fell -2.1% YoY, for the tenth consecutive monthly decline in YoY home prices.

Single-family home sales fell -.8% MoM and are down -10.8% YoY. The supply has risen to 8.7 months, and the median price has fallen -2.4% YoY.

Condos sales rose +2.6% MoM and are only down -6.7% YoY. The supply has fallen to 9.7 months, from a peak of 10 months in April. Existing condo prices have declined -.4% YoY.

Seasonally adjusted, total sales fell -.8% MoM. The Northeast had a 6.9% MoM gain in sales, followed by a +.8% MoM gain in the Midwest. The West saw a -.9% MoM decline, followed by the South with a -4.1% MoM decline. The gain in the Northeast appears to have been payback for the unusually weak sales the prior two months (-12.2% and -8.9%).

This data reflects actual purchase agreements made one to two months before the contract signing represented in these figures. So, these figures are just beginning to feel the impact of the subprime fall-out and tightening credit standards. The housing market is expected to remain depressed for the rest of the year, and will continue to impede economic growth. A study for the Joint Center for Housing Studies at Harvard University indicates that housing and the related industries (furniture, appliances, etc) account for 23% of the U.S. economy.