US DATA: Existing Home Sales Remain In Stasis

Existing home sales picked up a little more than expected in December to 4.24mln SAAR (4.20mln expected, 4.15mln prior), for  a 10-month high. 

• While the overall volumes of existing home sales remain depressed by historic standards, they at least continue to show signs of bottoming out: the 9.3% Y/Y rise  in sales was the largest such gain since June 2021, while the median existing home sales price rose 6% Y/Y $404,400.
• But at the same time, inventories dropped 13.5% M/M to 1.15mln, leaving the ratio of sales/inventory at 3.3 - a 9-month low and well off from the recent high of 4.3 in September.
• As such the existing home market can't really be characterized as tight or loose: it's in a period of stasis as buyers and sellers paralyzed by high mortgage rates and residential real estate prices.
• Indeed, what activity there is appears largely underpinned by better-heeled buyers who are less interest-rate sensitive, with cash remaining king: the NAR, cash sales accounted for 28% of transactions in December (near historic highs), while sales were up 35% Y/Y for homes priced at over $1mln but fell for those below $250k.
• While further improvement in home sales is plausible from such weak levels, there's unlikely to be any renewed dynamism unless interest rates fall substantially or unemployment picks up.