U.S. existing home sales likely to have dropped in May

The U.S. existing home sales is likely to have dropped a bit in May. In the month of April, resales had dropped 2.3 percent to a 5.57 million annualized rate, down from March’s cycle-high pace of 5.7 million units. Tight inventory is increasingly apparent, as the median home sold in April was on the market for less than a month, the shortest reported since the series started in 2011, noted Wells Fargo in a research report.

Price pressures have been quite tame, though the distribution of homes sold continues to be tilted toward higher-priced homes. Lean inventories are expected to have continued to place an upper limit on existing home sales in May. Pending home sales, which tend to lead existing home sales by six to eight weeks, dropped 1.3 percent in April, implying that resales might also have weakened in May, stated Wells Fargo. Existing home sales are expected to have dropped to 5.55 million, added Wells Fargo.