Existing home sales rebounded more than expected in April. Sales of existing homes jumped by 5.6% to 5.840 million units. Clearly, the pace of resales remains quite fast, analysts said. It has averaged 5.83 million units in the first four months of this year. This showing easily exceeds the record set in 2002 of 5.57 million. Analysts have concluded that the dip seen in March is not reflective of the true state of existing home sales, but rather it might have been related to the foul weather in February. Existing home sales are actually recorded at contract closing so this may explain the lag.
"Basically, home sales continue to soar to never before seen heights," said Steve Stanley from RBS Greenwich Capital. "With mortgage rates plunging to their lowest levels since the late 1950s, there is every reason to expect housing demand to be sustained."
Meanwhile, new home sales increased by 1.7% to 1.028 million. Strong new home sales were actually surprising, as April’s numbers rose further from an already-robust March reading. April’s level of 1.028 million units (annual rate) is the third highest on record. It is also the eighth month in the past nine months that new home sales are over the one-million unit pace. This rate had never been reached before 2002.
"Simply put, home sales are sizzling, and there is no sign ... of any vulnerability going forward (especially with mortgage rates continuing to fall)," Stanley stated.
