Existing Home Sales- 05.24.2010

Via Bloomberg:

April's expiration of second-round stimulus fed a 7.6 percent jump in existing home sales to a 5.77 million annual rate. But, in a big disappointment, supply on the market jumped 11.5 percent to 8.4 months. Heavy supply together with the absence of stimulus point to the risk of price erosion in the months ahead. But at least for April, prices did firm, up 2.1 percent to a median $173,100.

Details show comparable gains for both single-family homes, up 7.4 percent, and condos, up 9.1 percent. The Northeast led the regional breakdown while the West lagged.

Uncertainty over the housing outlook is a key negative for the economy. Should the jobs recovery weaken, foreclosures and distressed sales could make for new trouble in the housing sector. Stocks firmed off session lows following today's report. New home sales for April will be posted on Wednesday.

I am interested to see how the Fed incorporates these statistics into winding down their QE policy. Specifically, I am speaking about the sales of MBS which have helped bloat the U.S. Central Bank's balance sheet. Wednesday brings new home sales.

I was in Boston today taking in State Street. It does not have the outright intensity or ubiquity of Wall Street. However, the feeling of deal making still looms on State Street. This evening I saw an epic Celtics vs. Magic game 4 of the Eastern Conference Finals. The C's lost, but then again I am a Knicks fan...

Patrick M. Ambrus

Managing Partner

Analyze Capital LLC

Twitter: AnalyzeCapital