Lawler: Early Read on Existing Home Sales in May

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 3.8 million in May, down 12.2% from April’s preliminary pace and down 28.7% from last May’s seasonally adjusted pace. Unadjusted sales should show a larger YOY decline, reflecting this May’s fewer business days relative to last May’s.

On the inventory front, local realtor/MLS data, as well as data from other inventory trackers, suggest that the inventory of existing homes for sale at the end of May will be down about 20% from a year earlier.

Finally, local realtor/MLS data suggest that the median US existing single-family home sales price last month was up by about 2.6% from last May. This YOY increase reflects a sharp decline from recent months, though it is unclear from the available data whether this reflects weakening home values or a material shift in the mix of hones sold.

Here are a few other observations. First, while not all realtor reports break out sales by type of property (e.g., single-family detached vs. condo/townhomes), almost all that do reported larger YOY decline in condo/townhome sales than in single-family detached sales.

Second, while not all realtor reports include data on new pending sales – and some that do often revise those data significantly – almost all those that do report new pending sales showed either a significantly lower YOY drop in pending sales compared to closed sales or, in quite a few markets, a YOY INCREASE in pending sales last month.

While I do not have enough regional data to produce an accurate estimate of national pending sales in May, I am almost certain that the NAR’s May pending home sales index will show a VERY LARGE monthly increase from April’s PHSI.

CR Note: The National Association of Realtors (NAR) is scheduled to release May existing home sales on Monday, June 22, 2020 at 10:00 AM ET. The consensus is for 4.38 million SAAR.