US: Strong existing home sales numbers – Nomura

US existing home sales increased 1.1% m-o-m to an annualized pace of 5.60mn in March, above expectations (Nomura: -2.7% to 5.39mn, Consensus: +0.2% to 5.55mn) as a jump in sales in the Northeast and Midwest offset modest declines in the West and South, according to analysts at Nomura.

Key Quotes

“Some of the rebound in those regions may be partly related to a reversal from weather-related softness earlier in the year. The median existing home price increased 5.8% y-o-y, while available inventory remains 7.2% below the level this time last year. We continue to see some downside risk to existing home sales this year as low inventories and rising prices affect affordability. On a 12-month basis, existing home sales were down 1.2% in March.”

“GDP tracking update: Existing sales in March were somewhat stronger than we expected, implying stronger brokers’ commissions and hence residential investment in Q1. However, after rounding, our Q1 real GDP tracking estimate is unchanged at 1.6% q-o-q saar.”