The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

Still experiencing the influence of the home buying tax credit, April Existing Home Sales totaled, 5.77mm annualized, 150k above expectations and up from 5.36mm in March. However, due to a sharp inventory rise of 418k, the months supply rose to 8.4 from 8.1, the 2nd highest reading since last summer. The medium home price was $173,100, up 4% y/o/y to the most since Sept ’09. Evidence of the influence of the tax credit which only applies to 1st time buyers, the NAR estimates that 1st time buyers bought 49% of homes in April, up from 44% in March while investors bought just 15% down from 19% in March. The balance were repeat buyers. Distressed homes were 33% of total sales vs 35% in March. Bottom line, the data is old news because now the market is subject to good ole fashioned supply and demand where still subdued prices and lower mortgage rates will face off against a still tough labor market, no tax credit and still big supply.