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HOME SALES, WEIGHED BY HIGH BORROWING COSTS, SLIDE SIDEWAYS

About a month ago, the blog post on existing home sales began "investors embarked on a new week faced with a re-escalation of the Iran war after peace talks failed."

A month later, it's very nearly deja vu all over again, to quote Yogi Berra.

But this time, the sales of pre-owned U.S. homes USEHS=ECI improved by a nominal 0.2% last month to 4.02 million units at a seasonally adjusted annual rate (SAAR), according to the National Association of Realtors (NAR).

That's 0.7% shy of consensus, and the third lowest reading in about a year. It also follows March's 2.9% decline, upwardly revised from the initial -3.6% drop.

In detail, single-family home sales - which represented about 91% of the total - were essentially unchanged on the heels of the prior month's 3.2% dip. The volatile condo/co-op segment increased by 2.7% after a flat March.

NAR shows a 5.8% monthly increase of homes on the market. At April's languid sales pace, it would take 4.4 months to sell every home on the market, up from 4.2 months in March.

The slight increase occurs against a backdrop of rising borrowing costs. The average 30-year fixed contract rate currently sits at 6.45%, up 36 basis points since the onset of the war on Iran, according to the Mortgage Bankers Association. Even so, the 30-year fixed rate is 41 bps cooler than it was a year ago.

"Home sales remains rangebound at a low level, as high mortgage rates and low consumer confidence undermine demand," writes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "The underlying picture likely is a little weaker than the headline numbers suggest, given the temporary support from higher than usual average temperatures in March and April. Sales are unlikely to rise any further over the next few months."

While NAR's existing home sales report harkens back to April, housing stocks reflect where investors expect the sector to be six months to a year in the future.

While housing-related indexes - the S&P 1500 Homebuilding Index .SPCOMHOME and the PHLX Housing Index .HGX - handily outperformed the broader market in the first two months of the year, that advantage evaporated in March when the war on Iran pushed interest rates higher, taking mortgage rates with them.

Year-to-date, the SPCOMHOME and the HGX are now off 3.9% and 1.2%, respectively. During that time, the S&P 500 .SPX has risen 8.1%, claiming all-time highs.

(Stephen Culp)

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EARLIER ON LIVE MARKETS:

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NASDAQ 100'S AI GLOW MASKS A HIGHER BAR CLICK HERE

ENERGY'S BIG LEAD COMES WITH A BIG WARNING CLICK HERE

SELL ANY BEAR MARKET RALLY IN LUXURY NAMES - BERENBERG CLICK HERE

ECB HIKING PATH IN A CREDIBLE ESCALATION SCENARIO CLICK HERE

TIME TO INVEST IN DEFENCE? CLICK HERE

IRAN WAR IMPASSE CONTINUES, EUROPEAN STOCKS MIXED CLICK HERE

EUROPE BEFORE THE BELL: PEACE TALKS SUFFER ANOTHER HICCUP CLICK HERE

PEACE PROGRESS STALLS, AI RALLY DOES NOT CLICK HERE