Wednesday, February 21, 2018

A Few Comments on January Existing Home Sales

by Bill McBride on 2/21/2018 12:45:00 PM

Earlier: NAR: "Existing-Home Sales Slip 3.2 Percent in January"

A few key points:

1) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the consensus.  See: Lawler: Early Read on Existing Home Sales in January. The consensus was for sales of 5.65 million SAAR in December.  Lawler estimated 5.48 million, and the NAR reported 5.38 million.

"Based on publicly-available local realtor/MLS reports from across the country released through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.48 million in January, down 1.6% from December’s preliminary estimate and down 3.7% from last January’s seasonally-adjusted pace."
2) Inventory is still very low and falling year-over-year (down 9.5% year-over-year in January). More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases.    This was the 32nd consecutive month with a year-over-year decline in inventory.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Existing Home Sales NSAClick on graph for larger image.

Sales NSA in January (313,000, red column) were below sales in January 2017 (319,000, NSA).

Sales NSA will also be low seasonally in February.

We will probably have to wait until March - at the earliest - to draw any conclusions about the impact of the new tax law on home sales.