US: Existing home sales fell 3.2% in January - Nomura

Analysts at Nomura note that the US existing home sales fell 3.2% m-o-m to an annualized pace of 5.38mn in January, below expectations (Nomura: +1.6% to 5.66mn, Consensus: +0.5% to 5.60mn).

Key Quotes

“The prior month’s sales were revised down to 5.56mn from 5.57mn. Singlefamily home sales fell 3.8% m-o-m with broad-based slowing across regions, while sales of condos/co-ops rose 1.6% m-o-m. The National Association of Realtor attributed the decline in January to a continued shortage of inventories available for sale.”

“Lean housing supply appears to have stifled sales despite a strong level of buyers’ interest. Months’ supply indicator rose to 3.4 months from 3.2 in December, but the supply level remains low by historical standards. Although home prices have already been rising rapidly, consumers’ expectations of rising interest rates in the near term could be contributing to increased buyer interest. The median existing-home price in January was $240.5k (+5.8% y-o-y), highlighting the 71st consecutive month of y-o-y gains.”

“GDP tracking update: Existing home sales fell sharply in January, below our expectations. This downside surprise implies less brokers’ commissions in Q1, which are a component of residential investment. We lowered our tracking estimate of Q1 real GDP growth by 0.1pp to 1.8% q-o-q saar.”