Ian Shepherdson Supply Quotations

There is, in short, no sign that the housing market has turned down. The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

There is, in short, no sign that the housing market has turned down, ... The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

This is a surprise but it cannot last. We think the other elements of the report give a better indication of the strength of the market, with supply of single-family homes up to 5.3 months, compared to just 4.0 a year ago. Price gains have slowed to 7.8 percent year-on-year, down from 10.4 percent in Feb and a 19-month low. Much lower sales will follow.

Supply remains tight; buyers may have been unable to find the homes they want where they want them. Housing will not fold.

The key number in this report, in our view, is the rise in the supply of homes for sale. There are now 14.4 percent more homes for sale than a year ago, while actual sales are up just 3.3 percent. With mortgage demand slipping a bit and supply rising, price gains cannot continue at their current pace.