This just collapsed to the lowest level in 23 years. Plus a look at more “transitory”inflation.
May 30 (King World News) – Peter Boockvar: Pending home sales in April fell a sharp 7.7% m/o/m, well more than the anticipated 1% decline. This takes the index to just .5 pt from the lowest level on record dating back to 2001.
Pending Home Sales Collapse To Lowest In 23 Years
The NAR stated the obvious reason, “The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market.” They should have added, and ‘escalating interest rates on top of record high home prices that keep on rising.’
Bottom Line
Bottom line, we have the pace of existing home sales around the slowest since 1995 and that also negatively impacts all the ancillary activity that takes place around the transfer of a home from one owner to another, and for the home the seller moves into, and so on and so on. On the other hand, we know the pace is doing better but even there, the pace is no different than what we saw in 2019.
Shipping Costs Skyrocketing Again
Container shipping costs continue to jump as the World Container Index price for the Shanghai to Rotterdam trip rose another $271 w/o/w to $5,270, up 216% year to date. Yes, it is well below the $15,000 ish spike peak of 2021 but compares with about $2,000 at the beginning of 2020.
More “Transitory” Inflation On The Way
The route to LA was up $113 w/o/w to $5,390 and is up 60% over the past 4 weeks to also the highest since September 2022.
The CEO of Hapag Lloyd was interviewed yesterday on Bloomberg TV by Katie Greifeld and he said this to a question of whether they can start sailing in the Red Sea again, “Unfortunately not yet” and talked about what happened yesterday where the Houthi’s launched attacks on six ships in three different areas. He mentioned that because of what is going on capacity is tight and is also talking about strong demand. That demand strength, mentioned here by him a few weeks ago when they reported earnings, was uncertain as to why though. He also did say that while spot rates have spiked, contract rates haven’t moved that much compared to last year.
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