by Calculated Risk on 6/20/2018 11:59:00 AM

Earlier: NAR: "Existing-Home Sales Backpedal, Decrease 0.4 Percent in May"

A few key points:

1) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the consensus. See: Lawler: Early Read on Existing Home Sales in April.   The consensus was for sales of 5.56 million SAAR, Lawler estimated the NAR would report 5.47 million SAAR in May, and the NAR actually reported 5.43 million.

2) Inventory is still very low and falling year-over-year (YoY) with inventory down 6.1% year-over-year in May. This was the 36th consecutive month with a year-over-year decline in inventory, however the YoY declines have been getting smaller.

And some areas of the country are now reporting YoY increases in inventory.  As an example, the CAR  reported yesterday that inventory in California was up 8.3% YoY in May. More inventory would probably mean smaller price increases.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Click on graph for larger image.

Sales NSA in May (536,000, red column) were  below sales in May 2017 (555,000, NSA).

Sales NSA through May(first five months) are down about 1.4% from the same period in 2017.

This is a small decline - and it is too early to tell if there is an impact from higher interest rates and / or the changes to the tax law on home sales.