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Existing home sales disappoint; no bottom yet

May existing home sales of 4.77MM was 2.4% higher than April, but it was lower than the 4.82MM expectation.  The numbers were disappointing because May is the seasonally strongest month. 

Existing home sales grew sequentially in three of the four regions.  It continued its decline in the West region.  A big chunk of the sales figure was from foreclosures, which explains the lower prices.  They dropped another 14.7% Y/Y. 

Sales of condos and co-ops were much stronger than single-family homes. 

Inventory slightly declined, but the months supply figure remained above 9.5, which remains above where it was during other recession periods.  Months supply, although lower than April, is not showing any declining trend.  The latest figure is equivalent to what we saw in March.  Months supply was at 9.7 in Jan. and Feb.  Again, we are not seeing any so-called trend of declining inventories.      

As a reminder, this was data for not only a seasonally strong month but also a month that saw nearly record low rates.  We expect a sequential decline (and of course a Y/Y decline) for June.  In addition, the continuing increase in unemployment (which President Obama will likely touch on in a few minutes) will continue to drive home sales lower.