Existing Home Sales Down 7.1%

Housing demand continues to soften with existing home sales down a surprising 7.1 percent in February to a 5.080 million annualized rate. This is much lower than expected and well below Econoday's low estimate for 5.200 million and is the second lowest rate since February last year. The report is weak throughout with single-family sales down 7.2 percent, at 4.510 million, and condos down 6.6 percent at 570,000. All regions show declines in the month. The drop is described as "meaningful" by the usually upbeat National Realtor Association which compiles the report. The weakness in this report is substantial and represents a downgrade for housing, a sector that was supposed to be a leader of the 2016 economy.

Recent History Of This Indicator:
Existing home sales have been solid but haven't been accelerating, basically holding at a mid-to-low 5 million unit annual rate for the last year. In one sign of strength, single-home sales have been accelerating relative to condo sales which hints at strength for household wealth. Prices have been rising but less so than sales which points to discounting. And prices haven't been high enough to bring homes into the market as available supply remains very low. Forecasters see existing home sales coming in at a 5.305 million annualized rate in February, down noticeably from January's 5.470 million.