Existing Home Sales Drop To Multi-Year Lows

Key Insights

• Existing Home Sales declined from 4.03 million in December to 4 million in January. 
• Analysts expected that Existing Home Sales would increase to 4.1 million, so the report missed analyst estimates. 
• S&P 500 tested new lows after the release of the report. 

Existing Home Sales Missed Analyst Estimates

On February 21, U.S. released Existing Home Sales report for January. The report indicated that Existing Home Sales declined by 0.7% month-over-month after declining by 2.2% (revised from -1.5%) in December. Analysts expected that Existing Home Sales would grow by 2%, so the report missed analyst estimates.

Existing Home Sales have been declining since the beginning of 2022 as the housing market reacted to rising mortgage rates. It should be noted that mortgage rates have pulled back from the highs that were reached back in November 2022, and analysts believed that this pullback would provide support to Existing Home Sales.

The report showed that the housing market remained under significant pressure. It remains to be seen whether the current trend will change in the near term as Treasury yields are moving higher, pushing mortgage rates to multi-week highs.

Stocks Remain Under Pressure After Existing Home Sales Report

S&P 500 tested session lows after the release of the Existing Home Sales data. The activity in the housing market will likely remain weak in the upcoming months as the Fed will continue to raise rates.

U.S. Dollar Index pulled back towards the 104 level after the release of the report. Treasury yields continue to move higher, which is bullish for the U.S. dollar. Thus, it remains to be seen whether the report will have a material impact on U.S. dollar’s dynamics in today’s trading session.

Gold  continued to trade near the $1835 level as traders focused on rising Treasury yields. Existing Home Sales data had no impact on gold price dynamics.

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