by Calculated Risk on 6/22/2015 12:22:00 PM

First, last month housing economist Tom Lawler pointed out the data in the South looked funny, see: The “Curious Case” of Existing Home Sales in the South in April. Sure enough, sales for April were revised up, with all of the upward revision coming in the South.

Second, as always, new home sales are more important for jobs and the economy than existing home sales. Since existing sales are existing stock, the only direct contribution to GDP is the broker's commission. There is usually some additional spending with an existing home purchase - new furniture, etc - but overall the economic impact is small compared to a new home sale.

Third, in general I'd ignore the median sales price because it is impacted by the mix of homes sold (more useful are the repeat sales indexes like Case-Shiller or CoreLogic). The NAR reported the median sales price was $228,700 in May, just below the median peak of $230,400 in July 2006. That is 9 years ago, so in real terms, median prices are close to 20% below the previous peak.  Not close.

Inventory is still very low (up 1.8% year-over-year in May). More inventory would probably mean smaller price increases and slightly higher sales, and less inventory means lower sales and somewhat larger price increases. This will be important to watch over the next few months during the Spring / Summer buying season.

Note: I'm hearing reports of rising inventory in some mid-to-higher priced areas.

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

Click on graph for larger image.

Sales NSA in May (red column) were above May 2014, and were below May 2013 (NSA).

Earlier:
• Existing Home Sales in May: 5.35 million SAAR, Inventory up 1.8% Year-over-year

by Calculated Risk on 6/22/2015 10:10:00 AM

The NAR reports: Existing-Home Sales Bounce Back Strongly in May as First-time Buyers Return

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April. Sales have now increased year-over-year for eight consecutive months and are 9.2 percent above a year ago (4.90 million)....

Total housing inventory at the end of May increased 3.2 percent to 2.29 million existing homes available for sale, and is 1.8 percent higher than a year ago (2.25 million). Unsold inventory is at a 5.1-month supply at the current sales pace, down from 5.2 months in April.

Click on graph for larger image.

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by Calculated Risk on 6/22/2015 08:38:00 AM

The Chicago Fed released the national activity index (a composite index of other indicators): Index shows economic growth slightly below average in May

The Chicago Fed National Activity Index (CFNAI) moved up to –0.17 in May from –0.19 in April. Two of the four broad categories of indicators that make up the index increased from April, but only the employment, unemployment, and hours category made a positive contribution to the index in May.

The index’s three-month moving average, CFNAI-MA3, increased slightly to –0.16 in May from –0.20 in April. May’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
emphasis added

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

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by Calculated Risk on 6/21/2015 08:24:00 PM

First a couple of articles on Greece (this is a key week).

From the WSJ: Greece Pitches Last-Ditch Bailout Plan as Crisis Nears Endgame

From Larry Summers at the Financial Times: Greece is no longer about numbers. It is about the high politics of Europe

Pretty grim.

Monday:
• At 8:30 AM ET, the Chicago Fed National Activity Index for May. This is a composite index of other data.

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by Calculated Risk on 6/21/2015 12:36:00 PM

One of the areas I focused on during the housing bubble and subsequent bust was California's Inland Empire.

Way back in 2006 I disagreed with some analysts on the outlook for the Inland Empire. I wrote:

As the housing bubble unwinds, housing related employment will fall; and fall dramatically in areas like the Inland Empire. The more an area is dependent on housing, the larger the negative impact on the local economy will be.

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