NAR: Existing-Home Sales Decreased to 4.43 million SAAR in October
Median Prices Down 8.4% from Peak in June 2022
From the NAR: Existing-Home Sales Slumped 5.9% in October
Existing-home sales retreated for the ninth straight month in October, according to the National Association of REALTORS®. All four major U.S. regions registered month-over-month and year-over-year declines.
Total existing-home sales - completed transactions that include single-family homes, townhomes, condominiums and co-ops – decreased 5.9% from September to a seasonally adjusted annual rate of 4.43 million in October. Year-over-year, sales dropped by 28.4% (down from 6.19 million in October 2021).
Total housing inventory registered at the end of October was 1.22 million units, which was down 0.8% from both September and one year ago (1.23 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months in October 2021.
The sales rate was slightly above the consensus forecast.
Sales in October (4.43 million SAAR) were down 5.9% from the previous month and were 28.4% below the October 2021 sales rate. Sales are now well below pre-pandemic levels and, excluding the pandemic decline, sales are now at the lowest level since 2012.
Sales Year-over-Year and Not Seasonally Adjusted (NSA)
The second graph shows existing home sales by month for 2021 and 2022.
Sales declined 29.5% year-over-year compared to October 2021. This was the fourteenth consecutive month with sales down year-over-year.
The third graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black and light Purple are the maximum sales per month during the bubble (2005) and the minimum sales during the bust (2008 - 2011). The most recent four years are shown (2019 through 2022).
Sales NSA in October (371,000) were 29.5% below sales in October 2021 (526,000). Sales NSA year-to-date are down 14.3% compared to the same period in 2021.
This decrease, NSA, was similar to change in the markets I track each month.
Housing Inventory Decreased Slightly in October
The fourth graph shows nationwide inventory for existing homes.
According to the NAR, inventory decreased to 1.22 million in October from 1.23 million in September.
Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The fifth graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Inventory was essentially unchanged year-over-year (blue) in October compared to October 2021. This includes some pending sales - and doesn’t match some other measures - and it seems likely that active inventory was up year-over-year much more in October than the NAR is reporting.
Months of supply (red) increased to 3.3 months in October from 3.1 months in September.
Median House Prices
On prices, the NAR reported:
The median existing-home price for all housing types in October was $379,100, a gain of 6.6% from October 2021 ($355,700), as prices rose in all regions. This marks 128 consecutive months of year-over-year increases, the longest-running streak on record.
Median prices are distorted by the mix (repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices).
The YoY change in the median price peaked at 25.2% in May 2021 and has now slowed to 6.6%. The YoY increase in October was the lowest since June 2020. Note that the median price usually starts falling seasonally in July, so the 1.1% decline in October in the median price was partially seasonal, however the 8.4% decline over the last four months has been much larger than the usual seasonal decline.
It is likely the median price will be down year-over-year in a few months.
Existing home sales are being impacted by higher mortgage rates. Mortgage rates increased sharply in October, and that will impact closed sales in November and December - so I expect further declines in sales later this year.
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