Implications:  After hitting the fastest pace in more than a decade in March, existing home sales took a breather in April.  Sales of previously-owned homes fell 2.3% in April to a 5.57 million annual rate, but are still up 1.6% from a year ago.  It is important to remember home sales are volatile from month to month, and we expect the general upward trend of the past several years to keep going.  That being said, tight supply and rising prices remain headwinds.  Inventories have now fallen on a year-over-year basis for 23 consecutive months and are down 9% from a year ago.  Inventories were the lowest on record for any April dating back to at least 1999, when reporting began.  This has also affected the months' supply of existing homes – how long it would take to sell the current inventory at the most recent sales pace – which was 4.2 months in April, down from 4.6 months a year ago.  According to the NAR, anything less than 5.0 months is considered tight supply.  The good news is that demand for existing homes was so strong that a typical property only stayed on the market for 29 days, the shortest timeframe on record since the NAR began tracking in 2011.  Higher demand and a shift in the "mix" of homes sold toward more expensive properties has also driven up median prices, which have now risen for 62 consecutive months on a year-over-year basis.  Sales of homes in the 0-$100K and $100-250K ranges, which together represented 53.5% of total sales in April, are the only price brackets where sales are down from a year ago, signaling that supply constraints may be disproportionately hitting the lower end of the market.  Tough regulations on land use raise the fixed costs of housing, tilting development toward higher end homes.  The NAR suggests that strong demand could also be pushing some properties into higher brackets as multiple offers boost the final sales price.  Although some analysts may be concerned about the impact of higher mortgage rates, it's important to recognize that rates are still low by historical standards, incomes are growing, and the appetite for homeownership is eventually going to move higher again.  In other housing news this morning, the FHFA Index, which measures prices for homes financed with conforming mortgages, rose 0.6% in March and is up 6.3% from a year ago.  In the year ending in March 2016, FHFA prices were up 6.3% as well.

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