Data released on Monday showed the Existing Home Sales tumbled 9.7% in May to 3.91million (annual). Analysts at Wells Fargo point out May existing home sales reflected activity during the latter half of March and the month of April, or the period when much of the economy was shut down. They expect a rebound in June in sales.
Key Quotes:
“Sales of single-family homes fell 9.4% and sales of condos & co-ops dropped 12.8%. May marks the third consecutive monthly drop for these three series and is also likely the near-term low. Overall sales are down 26.6% from the same month last year.”
“The National Association of Realtors tracks completed transactions, or closings, which tend to lag purchase contracts by 30 to 45 days. That means May existing home sales reflect activity during the latter half of March and the month of April, or the period when much of the economy was shut down and many state prohibited home showings.”
“We expect existing home sales to rebound in June. Low mortgage rates, a buoyant stock market and the big bounce back in May nonfarm payrolls all suggest that home buying should be less impacted than many other types of economic activity. Past experience suggests that a nesting effect kicks in during times of national trauma, resulting in increased home sales and more spending on home improvements. The early evidence supports this notion.”
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