Implications:  Existing home sales bounced back in March, beating consensus expectations, and showing healthy demand headed into the spring selling season.  Sales of previously owned homes rose 5.1% in March to a 5.33 million annual rate, and are now up 1.5% from a year ago. Even though this month's gain didn't completely reverse February's drop we think the broader trend will continue to be upward. That being said, tight supply and rising prices continue to be the main factors holding back sales. While inventories rose 5.9% in March they are still down 1.5% from a year ago. In fact, the months' supply of existing homes – how long it would take to sell the current inventory at the most recent selling pace – is only 4.5.  According to the National Association of Realtors anything less than 5.0 months is considered tight supply. The good news is that demand was so strong in March that properties typically only stayed on the market for 47 days, down from 59 days in February. In fact, 42% of properties in March sold in less than a month, pointing to further interest from buyers in the months ahead. The median price for an existing home is up 5.7% versus a year ago, marking the 49th consecutive month of year-over-year price gains. While this may be pricing some lower-end buyers out of the market, it should help alleviate some of the supply constraints as "on the fence" sellers take advantage of higher prices and trade-up to a new home, bringing more existing properties onto the market.

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