Existing home sales drop in May
* Existing home sales fell 2.2% to a seasonally adjusted annual rate of 5.66 million in May from 5.79 million in April. That was far worse than forecasts for a sales rate of 6.12 million, and comes on the heels of a 8% gain a month earlier.
* Regionally, sales were a mixed bag. They tanked 18.3% in the Northeast and held steady in the Midwest. Sales inched up 0.5% in the South and gained 4.9% in the West. By property type, single family sales fell 1.6% while condo and coop sales dropped 6.8%, the sharpest monthly decline since January.
* The raw number of homes for sale fell 3.4% to 3.89 million from 4.029 million in April. Compared with a year earlier, supply was up 1.1%. The months supply at current sales pace indicator of inventory dipped ever so slightly to 8.3 from 8.4. Median prices rose 4.2% to $179,600 from $172,300 a month earlier. They're also up 2.7% from the year-ago level of $174,800.
The second burst of activity in the housing market, courtesy of the tax credit extension, appears to be running out of steam. Existing home sales came in well below expectations in May. New home orders are trailing off. Lumber prices have plunged more than 40% in a virtual straight line. And purchase mortgage applications and builder confidence are both hitting the skids.
We still have cheap homes and cheap mortgages there for the taking. We just don't have a lot of buyers willing or able to step up to the plate. That will likely remain the case unless and until we get some momentum in the job market. So far, that's MIA.