NAR: Existing-Home Sales Decreased to 3.79 million SAAR in October; New Cycle Low

Months-of-Supply Close to 2019 Levels

From the NAR: Existing-Home Sales Receded 4.1% in October

Existing-home sales dropped in October, according to the National Association of REALTORS®. Among the four major U.S. regions, sales slid in the Northeast, South and West but were unchanged in the Midwest. All four regions experienced year-over-year sales declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 4.1% from September to a seasonally adjusted annual rate of 3.79 million in October. Year-over-year, sales tumbled 14.6% (down from 4.44 million in October 2022).
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Total housing inventory registered at the end of October was 1.15 million units, up 1.8% from September but down 5.7% from one year ago (1.22 million). Unsold inventory sits at a 3.6-month supply at the current sales pace, up from 3.4 months in September and 3.3 months in October 2022.
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The sales rate was below the consensus forecast.

Sales in October (3.79 million SAAR) were down 4.1% from the previous month and were 14.6% below the October 2022 sales rate.

Housing Inventory Increased in October

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.15 million in October from 1.13 million the previous month.

Usually inventory decreases in October, but occasionally inventory increases. This increase will likely remind some analysts of the increase in October 2005 and October 2006; however, the market dynamics were very different, and inventory is currently still very low.

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 third 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 down 5.7% year-over-year (blue) in October compared to October 2022. Months of supply (red) increased to 3.6 months in October from 3.4 months the previous month.

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2022 and 2023.

Sales declined 14.6% year-over-year compared to October 2022. This was the twenty-sixth consecutive month with sales down year-over-year. This was a new cycle low, below the 3.95 million SAAR in September 2023.