The National Association of Realtors compiled data for Sales of existing U.S. homes in May and released the figures today showing a drop to the lowest level in six months. The news isn’t good since recently there has been a spate of other poor economic data. The housing numbers indicate that that the housing market is lagging, adding to the view that the U.S. economy is slumping.
Data indicate that existing homes sales dropped to a 4.81 million annual pace last month, from 5 million, though in line with expectations (4.8 million forecast).
The poor housing data in the past year will persuade US Federal Reserve policy makers to maintain record stimulus when they meet later this week. The recent non-farm payrolls data and n9 percent unemployment rate also adds to the Fed’s reasoning.
“There is no real let-up in the weakness,” said David Semmens, and economist at Standard Chartered Bank in New York. “Distressed sales are going to be weighing down prices further.”
A breakdown of the data show that the median sales price declined from a year earlier and 31 percent of transactions were actually of distressed dwellings.
After release of the news, the Dollar didn’t move significantly due to the fact that the market already discounted all the bad news and poor economic data from the US recently. What will cause bigger moves will be the decision of the Fed on monetary policy and interest rates later this week.