by Calculated Risk on 4/21/2010 08:35:00 PM

Existing home sales for March will be released tomorrow and the consensus is for the NAR to report 5.25 million sales on a seasonally adjusted annual rate (SAAR) basis. That is probably close (I'll take the under). The NAR reported a 5.02 million sales rate in February.

1) The Federal tax credit expires at the end of April for buyers to sign a contract. Since existing home sales are reported when the transaction is closed (by the end of June to qualify for the tax credit), the tax credit probably had little impact on March sales. The boost to reported existing home sales from the tax credit will probably come mostly in May and June.

2) New home sales are counted when the contract is signed, so the boost should come earlier (March and April). The Census Bureau will report March new home sales on Friday.

3) The MBA mortgage purchase index is showing only a small pickup in purchase applications - so it appears the boost to sales from the tax credit will be much smaller than last year.

4) The level of existing home inventory is probably the most interesting detail in the NAR report tomorrow. Unfortunately there appears to be some discrepancy between local inventory levels and the number the NAR reports. However, on a year-over-year basis, inventories have been declining for the last 19 months. It is possible that the inventory level in March will be above March 2009 (3.65 million in March 2009). So that is something to watch for ...