Leading indicators are pointing to a large fall in existing home sales. For example, the recent sharp decline in the NAR buyer traffic balance is consistent with a fall in sales to 4.5m annualised which, excluding the COVID-related dip of 2020, would represent a 10-year low. Set against that, there is evidence of pent-up demand in the market which argues against a drop of that magnitude. Overall, the deterioration in leading indicators means we have cut our forecast for existing home sales to 4.8m by end-2022, a 22% y/y fall.
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