Existing home sales fell 0.2% in March falling from 4.60 million to a 4.59 million unit pace, the lowest level since December.
On a three-month average basis, the pace of sales is 4.60M.
Existing home sales year over year
The decline in March was led by multi-family sales, down 1.8%. Single family sales were flat in March. Year over year, existing home sales are down 7.5%. From a supply standpoint, with demand noticeably waning, months’ supply rose from 5.0 to 5.2 in March, an 11-month high.
The median price of an existing home rose from $188k to $199k in March, up nearly 8% over the past 12 months. (Separately this morning, the FHFA reported a 0.6% increase in February home prices.)
From a regional standpoint, sales were weak in the South and West, down 3.0% and 3.7%, respectively. Sales in the Midwest and North, on the other hand, were up 4.7% and 9.1%, respectively.
Bottom line: Demand for housing remains uneven after months of heightened sales activity earlier in 2013. Now against the backdrop of minimal income growth and a still-tepid labor market, demand continues to wane. For potential home buyers, rising prices are eroding affordability, putting further downward pressure on consumer’s ability and willingness to finance a home purchase. From the owner’s perspective however, rising prices are helping to create and maintain a wealth effect, fueling (or at least helping to support) consumer spending.
Also this morning, the business activity index for the mid-Atlantic region, the Richmond Fed, rose from -7 to 7 in April.
Richmond Fed Manufacturing Index
In the details, shipments rose from -9 to 6 at the start of the second quarter, new orders improved from -9 to 10 and capacity utilization gained from -14 to 1. Employment also improved in April, rising from 0 to 4, a three-month high. The workweek, however, was unchanged at a reading of 2.
Bottom line: A welcomed step in the right direction suggesting manufacturing activity in the Carolinas, DC, Maryland, and the Virginias is beginning to pick up after months of back-to-back contractions in February and March. But while a welcomed improvement, the increase in April is hardly a return to the activity levels seen at the end of 2013-start of 2014 when the headline index averaged a reading of 13.
Yesterday the Chicago Activity Index fell from a revised 0.53 to 0.20 in March, in line with expectations.
Chicago Fed Activity Index
The Chicago Fed Index draws on 85 economic indicators with a reading below zero an indication of below-trend growth and easing inflation pressures.
This is the second consecutive positive reading after falling to -0.74 in January. On a three-month average basis, the index is flat, a slight improvement from a -0.09 trend at the end of Q1 2013.