→ EHS will surprise downward due to technical and fundamental factors:

Buyers signed contracts in April for most May sales. As a result, lockdowns made it impossible for the rebound in closings to be finalized before June.

Local and state reports confirm that many sellers waited before putting their homes on the market, restricting supply (and choices for buyers).

→ EHS will rebound sharply in June as suggested by first data related to pending home sales.

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1. Data construction implies that May will reflect the worst of the crisis

Most of economists never looked at the construction of EHS data which explains a large part of miscalculation. According to the Census Bureau, "the majority of transactions are reported when the sales contract is closed. Most transactions usually involve a mortgage which takes 30-60 days to close. Therefore, an existing home sale (closing) most likely involves a sales contract that was signed a month or two prior." In other words, most buyers placed their offers in April (and to a lesser extent in March), during the height of stay-at-home orders. As a result, May existing home sales will reflect the worst of the crisis, with a print likely below 4.00M.