INSTANT VIEW: U.S. existing home sales pace falls in April

NEW YORK (Reuters) - The pace of existing home sales in the United States fell 1 percent in April to a 4.89 million-unit annual rate, the National Association of Realtors said in a report on Friday that was slightly better than expectations.

KEY POINTS: * Inventories of unsold homes rose measurably, surging 10.5 percent to 4.55 million units at the end of April. At the current sales pace that would put the supply of homes at 11.2 months' worth, the highest level since the association began tracking single family and condo properties together in 1999. * For single family homes, at the current sales pace there were 10.7 months' worth, the biggest supply since June 1985 when it stood at 11.4 months.

COMMENTS:

IAN SHEPHERDSON, CHIEF U.S. ECONOMIST, HIGH FREQUENCY

ECONOMICS, VALHALLA, NEW YORK:

"Sales in both the single-family and co-op/condo sectors fell marginally, but given the reliability of the numbers the past few months' sales have been more or less flat after a calamitous plunge in the final few months of last year. We regard this as a temporary phenomenon, like the small upticks in sales in the spring of 2006 and early 2007. With prices collapsing the incentive not to buy a home is increasing by the week, and with inventory showing no sign of improvement prices will keep falling. Supply always rises in spring so the headline inventory numbers overdo the true position, but it is still bad."

RUDY NARVAS, SENIOR ANALYST, 4CAST LTD, NEW YORK:

"Essentially it came in near expectations but the big surprise was the inventory of unsold homes rising to a record level. This would suggest to us that further price declines are going to be necessary for the inventory to clear. And the situation is made worse given that banks and other mortgage providers are tightening up lending standards, and as prices decline lenders will become even more unwilling to give out mortgages. On the surface the 4.89 is not that bad but the underlying situation still does not look that great."

ROBERT MACINTOSH, CHIEF ECONOMIST, EATON VANCE CORP, BOSTON:

"I guess it's better than expected. We actually had some surprising good housing numbers last week, although a lot of that was multi-family. So that isn't telling you what the single-family, more traditional home market is doing.

"Out of this existing home sale signal, most important is the supply of homes continues to go up to 11.2 months. That's the key here, inventories are continuing to build up, at least relative to sales. That's not healthy.

"You can't say the housing market is at a turning point until you start to see the supply relative to sales come down. The raw number, actual sales, is not as negative as we might have thought, but I'm dismissing that by checking the supply relative to sale."

DAVID DIETZE, CHIEF INVESTMENT STRATEGIST, POINT VIEW FINANCIAL

SERVICES, SUMMIT, NEW JERSEY:

"The report wasn't quite as disappointing as the market had expected. At first blush, I am not seeing Treasuries reacting much. The market seems to be hanging in firm. With stocks weaker and ahead of a long weekend, Treasuries have caught a safe haven bid."

WARREN SIMPSON, MANAGING DIRECTOR, STEPHENS CAPITAL MANAGEMENT,

LITTLE ROCK, ARKANSAS:

"I think this existing home sales number is pretty neutral. It's still not great. The main thing is where is the bottom, here? I think between oil and housing its going to take a while for the market to be able to go up again."

BRIAN STINE, SENIOR PORTFOLIO MANAGER, ALLEGIANT ASSET

MANAGEMENT, CLEVELAND:

"It may be a slight positive. We've been close to unchanged over the last five or six months. We haven't seen the steep declines that we experienced last year. It's too early to say for sure but we could be getting to the bottom in terms of housing"

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BANK OF NEW YORK

MELLON, NEW YORK:

"The report was slightly better than expected. We can't say the housing market is picking up, but certainly the pace of the decline is slowing down. For the dollar, this is somewhat positive, especially when combined with poor data that came out of Europe earlier today. Still, the focus in the forex market seems to be shifting to oil and ahead of a holiday in the U.S., trading seems to be very thin. Bottom line, we might not see much of a rebound in the greenback today on the housing data."

MARKET REACTION: * BONDS: U.S. Treasury debt prices pare gains * CURRENCIES: U.S. dollar pares losses * STOCKS: U.S. equity indexes pare losses * RATE FUTURES: U.S. short-term interest rate futures hold steady, pricing in an 10 percent probability of a 25 basis point rate cut at the Fed's June meeting.