First in line, existing home sales for the month of March came in at 4.93 million houses slightly higher than the expected reading of 4.92 million houses and less than the prior reading of 5.03 million houses. As for the house price index was released coming in at 0.6% worse than both the predicted reading of -1.3% and previous reading of -1.1%.
As we see the sudden effect in the market was the Federal currency gained against majors and stock markets started shedding points. Despite the fact that the news was not that upbeat, it still came in better than expectations giving market players a push that their could be light shining at the end of the tunnel as the credit crisis and sub-prime mortgage crisis have peaked.
Inventories have climbed in March by 1% to reach 4.06 million signifying a 9.9 month supply. Existing home sales are seen to stabilize over the past seven months as sales came in between 4.90 and 5.10 million. However, this doesn't mean that it's over. The sector remains soft!
Over the past year, median sales prices fell 7.7% to $207,000 marking the second largest price decline since 1999. Sales of single family homes fell 2.7% to 4.35 million while condo and co-op sales rose 3.6% to 580,000.
It's true that housing prices have picked up as they rose 0.6% in February from January; but on a yearly basis, prices actually fell 2.4% and this is where the mix up kicks in! If prices are actually on the rise, then this will mean that the crisis is over and therefore people will start buying houses. But take a look at the market people!! After the dollar gained for a very short period, the Euro was able to surge and record an all time high of 1.5992!
Markets are going LOCO! ECB officials are stressing on the fact that a rate cut is not possible! A hawkish tone is sensed now after ECB's Weber, Merch and Noyer are saying that we need to focus on inflationary data which indicated a 3.6% inflation rate when the target is 2.0%! This, ladies and gentlemen, has altered rate expectations in the EU zone as well!
Back to the dollar, it seems to be mixed at the moment as data from the U.S. is at a critical stage. Market sentiment altered at the end of last week although Citigroup released its earnings reporting larger than expected losses. Everyone sees a peak to the turmoil but who knows if this peak is the end of the mountain? New home sales could clear things up a bit on Thursdayâ€¦