Tuesday’s update on existing home sales confirmed what Monday’s new home sales only hinted at: the real estate market’s cooling.
May’s tally of existing home sales (by far the larger data sample compared with new homes) dropped 1.2%, the National Association of Realtors reported yesterday. That’s the second monthly decline in a row, while May’s sales are off 6.6% from the year-earlier figure.
The Northeast U.S., the leading property market in the country, suffered the biggest hit in May, with sales of existing homes falling by 4.2%. Meanwhile, the West through last month endured the worst year-over-year comparisons, posting a -13.5% stumble in sales as of May.
This, dear readers, is what a cooling housing market looks like. And given the outlook for interest rates, which is still up, expect more of the same from the world of housing.
Additional clues of a slowdown in the formerly red-hot property market can be found in the stocks of home builders. Indeed, among the 129 equity industries tracked by Morningstar, home building is dead last in performance terms so far this year through yesterday, posting a -28.5% collapse. By comparison, the S&P 500 is up fractionally so far this year with a 17-basis point return through last night.