April existing home sales slip; inventory surges
* Sales dropped 1% to a seasonally adjusted annual rate of 4.89 million in April from 4.94 million in March (previously reported as 4.93 million). That was a bit better than the forecast of 4.85 million home sales. Sales were down 17.5% from the year earlier reading of 5.93 million, and they matched the cycle (and record) low of 4.89 million units in January.
* By region, sales dropped 4.4% in the Northeast and 6% in the Midwest. Sales were unchanged in the South and up 6.4% in the West. By property type, sales dropped 0.5% in the single-family market and 5.2% in the condo arena.
* The supply of homes for sale shot up 10.5% to 4.552 million units in April from 4.118 million in March (previously reported as 4.058 million) and 4.22 million a year earlier. The absolute number of homes for sale is just shy of the 4.561 million peak, set last July. Single-family home only inventory rose to 3.9 million homes, the highest I can find on record (my data goes back to 1982 -- chart above).
On a months supply at current sales pace basis, inventory jumped to 11.2 months from 10 months in March (previously reported as 9.9) and 8.5 a year earlier. That is a new record, though the data for SFH+condos+coops only goes back to 1999. The SFH-only data (10.7 months) shows this is the most oversupplied the market has been since 1985.
* Median home prices rose 1.1% to $202,300 in April from $200,100 in March (previously reported as $200,000). They fell 8% from $219,900 a year earlier, however, the eighth month in a row of year-over-year declines.
The headline writers are probably having a tough time coming up with new ways to say "The housing market stinks." But that's clearly what the latest numbers show. Home sales dipped again in April. Home prices took the eighth year-over-year tumble in a row. Most importantly, the inventory of homes for sale surged. We're now the most oversupplied since the mid-1980s.
The only way we're going to clear this supply glut is through lower prices. Some markets -- specifically, those with the most aggressive price cutting going on -- appear to be making some progress on the inventory front. Traditional sellers, lenders loaded down with REO property, and home builders in those markets are doing what they need to do to attract buyers. Others aren't making as much progress because sellers there are just too stubborn.
Bottom line: The 2008 spring selling season will go down in the books as another disappointing one, just as I expected.