April sales of existing homes rise

Housing prices DID surge (by 7.6%), however, inventories surged even more (11.5%) to go break the 4-million mark.

Sales came in stronger than the 5.63 million pace expected by economists surveyed by MarketWatch. Sales in March were revised up to 5.36 million pace from the 5.35 million reported originally. See our complete economic calendar and consensus forecast.

However, inventories surged 11.5% to 4.04 million last month — an “unwelcome” development, said Lawrence Yun, chief economist for the real estate agents’ lobbying group. Read the full press release on the NAR’s Web site.

The inventory level represented an 8.4-month supply at the April sales pace. Inventories typically rise in April, but this year’s gain was bigger than usual, Yun said. The inventory data are not seasonally adjusted.

The troubling point sitting there in front of this article is:

The median price is up 4% in the past year at $173,100, according to NAR figures.

It’s not clear what’s behind the increase in homes for sale, he said.

It could be pent-up supply from homeowners who’ve wanted to sell but didn’t think the market was right. That would also imply pent-up demand.

But it’s also possible that investors are putting their properties on the market because they aren’t getting the cash flow they need.

I think it is very plain what is happening. There are two markets: California, Florida and the rest of the United States. California makes up 58% of the Alt-A loans and Florida 10%. The rest of the country makes up the remaining 32%. I would wager that, after the tax credit era is over (which it is), the data will show the rest of the country is stable (for now) and CA & FL are still falling. When the Alt-A’s really begin to hit, the rest of the country WILL feel it to some extent.

To remind everyone of where we are, here is the graph to remember:

Alt-A Mortgage Resets

The entire article is here:

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