June 1 Home Sale Update

On the residential side, home sales continue to show signs of stabilization, though this may be threatened by the ongoing back-up in mortgage rates.  New home sales were little changed near a record low in April, ticking up 0.3% to a 352,000 unit annual rate.  With single-family housing starts also near a record low, the stability in sales recently allowed the number of unsold new homes to fall another 4.2%.  There has been an improvement in the months' supply of unsold new homes to 10.1 from the record 12.4 hit in January, but this remains way above more normal levels of around six months.  Meanwhile, existing home sales have also been roughly steady in recent months after a 3% gain in April to a 4.68 million unit annual rate.  A very high share of existing home sales has been of foreclosed properties, however, which continue to flood the market -   the Mortgage Bankers Association reported yet another quarter of record rates of mortgage delinquencies and foreclosures in 1Q - and keep prices under pressure and inventories elevated.
Source:  Morgan Stanley
http://www.morganstanley.com/views/gef/index.html