Economic data

April Existing Home Sales totaled 5.05mm annualized, 150k below forecasts and down from 5.09mm in March. Sales for both single family and condos/co-ops were down and because the absolute number of homes for sale rose by 350k to the most since Sept, the months supply rose to 9.2 from 8.3, the most since Nov. The median home price fell 5% y/o/y. Distressed sales made up 37% of sales vs 40% in March. Bouncing along the bottom remains the theme and highlighting the influence of tight lending standards and stricter appraisal readings, the NAR said 15-20% of home sales are being held back “due to the very restrictive loan underwriting standards” and 11% of contracts were cancelled because an appraisal was below the negotiated price, 10% had a contract delayed and 14% said a contract price was “renegotiated to a lower sales price as a result of a low appraisal.” Also unsaid by the NAR, more want to rent than own right now.

Following a weak NY mfr’g survey on Monday, the May Philly mfr’g survey was well below expectations at 3.9 vs the estimate of 20.0 and down from 18.5 in April. It’s the lowest since Oct. New Orders fell to 5.4 from 18.8 and Backlogs went negative to -7.8 from +12.9. The bright spot was the Employment component which rose 10 pts to 22.1, the 2nd best since ’04 (but the 6 month outlook in hiring fell 15 pts). The Avg Workweek fell to 3.9 from 17.7. Prices Paid fell to 48.3 from 57.1 and Prices Received was down by 10 pts, both a quick response to the commodity relief over the past few weeks. Also disappointing to the headline Philly figure was the 6 month outlook which fell 17 pts to 16.6, the weakest since Jan ’09. Bottom line, we need to see more regional surveys and the national ISM to get a full view of the state of mfr’g nationally but data seen so far this week shows there is a clear moderation after heady gains.

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