US: Existing home sales print 0.4% for May – Nomura

Analysts at Nomura note that US existing home sales fell 0.4% m-o-m in May to 5430k saar, below expectations (Nomura: +1.5% to 5540k, Consensus: +1.1% to 5520k), after falling 2.7% m-o-m in April.

Key Quotes

“Single-family home sales remained weak, down 0.6% m-o-m in May after falling 3.0% in April. Purchases of single-family homes dropped in all regions except for the Northeast, suggesting that the slowdown in May was broad-based.”

“The scarcity of inventories will likely remain as near-term supply constraints, especially for the entry-level segment. The total stock of homes for sale fell 6.1% y-o-y and months’ supply indicator was at 4.1 months in May, which is low compared to the historical standard.”

“While the strong labor market should continue to boost consumer demand, rising home prices driven by scarce supply may somewhat dampen demand.”

“GDP tracking update: May existing home sales were weaker than expected and April sales were revised down. This suggests less brokers' commissions in Q2, a component of residential investment. However, after rounding, our Q2 real GDP tracking estimate remains unchanged at 4.1% q-o-q saar.”