[Source: NAR , click to expand]
Last week we were given another dose of housing news – housing sales didn’t go negative for the first time in four months (m-o-m)  as inventory continued to expand and prices kept rising. Even though mortgage rates are down to what they were shortly after the rate spike last spring, it’s not stimulating much of an increase in sales activity (translation: no correlation between housing prices and mortgage rates ). I still refer to Nick Timiraos’ epic post of charts last month . Lower sales will continue to expand inventory and take the edge off of price growth.
Looking back over 2013 – the housing market wasn’t “recovering”  – prices were rising from the perfect storm of tight credit, sentiment that things were getting better, surviving the fiscal cliff and threat of rising mortgage rates. The market was rebounding off a low point that had nothing to do with fundamentals. I still think we will see some improvement over the next several years but it will be nominal until the economy shows real improvement i.e. jobs, income and credit.
Removing all seasonal adjustments, here’s what the key NAR US Existing Home Sale metrics  look like to me:
UPDATE Here’s a wonky explanation from the Federal Reserve Bank of San Francisco  of the existing sale slow down in their Economic Letter.