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Data released today showed a decline in April of existing home sales. Analysts at Wells Fargo, point out that sales have fallen in five of the past six months and are down 4.4% from the same month a year ago.  According to them, lower mortgage rates have helped stymie the sharp pullback in home sales seen last year but have clearly not reversed it

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“During April, total resales fell well below expectations, dropping 0.4% to a 5.19 million-unit pace. With the exception of an 11.2% surge in February, which set the high-water mark for the year at a 5.48 million-unit pace, total sales have declined in five out of the previous six months. Still, while somewhat underwhelming, existing sales remain at a fairly solid pace and are running just slightly below their year-ago pace through April, thanks to the surge in sales during February.”

“A significant breakout in existing home sales is unlikely this year but sales should be stronger than they have been the past few months. Easter came late this year, which likely hurt April’s sales. Mortgage rates fell to 4.14% in April, the lowest point since early last year. The combination of lower rates and easing prices has led to a pickup in purchase applications.”

“While volatile week-to-week, purchase applications have trended higher this year. Through May 10, the purchase application index is 4.0% above the level averaged last year during that same period. We expect existing homes sales to rebound in May, possibly even with a big catch-up number.”