NAR: Existing-Home Sales Decreased to 4.71 million SAAR in September

From the NAR: Existing-Home Sales Decreased 1.5% in September

Existing-home sales descended in September, the eighth month in a row of declines, according to the National Association of REALTORS®. Three out of the four major U.S. regions notched month-over-month sales contractions, while the West held steady. On a year-over-year basis, sales dropped in all regions.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, retracted 1.5% from August to a seasonally adjusted annual rate of 4.71 million in September. Year-over-year, sales waned by 23.8% (down from 6.18 million in September 2021).
...
Total housing inventory registered at the end of September was 1.25 million units, which was down 2.3% from August and 0.8% from the previous year. Unsold inventory sits at a 3.2-month supply at the current sales pace – unchanged from August and up from 2.4 months in September 2021.
emphasis added

The sales rate was close to the consensus forecast.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in September (4.71 million SAAR) were down 1.5% from the previous month and were 23.8% below the September 2021 sales rate. Sales are now well below pre-pandemic levels and, excluding the pandemic decline, sales are now at the lowest level since 2014.

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

The second graph shows existing home sales by month for 2021 and 2022.

Sales declined 23.8% year-over-year compared to September 2021. This was the thirteen 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 September (428,000) were 21.6% below sales in September 2021 (546,000).   Sales NSA year-to-date are down 12.6% 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 September

The fourth graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.25 million in September from 1.28 million in August.

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 September compared to September 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 August than the NAR is reporting.

Months of supply (red) was unchanged at 3.2 months in September from 3.2 months in August.

Median House Prices

On prices, the NAR reported:

The median existing-home price for all housing types in September was $384,800, an 8.4% jump from September 2021 ($355,100), as prices climbed in all regions. This marks 127 consecutive months of year-over-year increases, the longest-running streak on record. It was the third month in a row, however, that the median sales price faded after reaching a record high of $413,800 in June, the usual seasonal trend of prices trailing off after peaking in the early summer.

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 8.4%. The YoY increase in September was the same as in August. Note that the median price usually starts falling seasonally in July, so the 1.8% decline from August to September in the median price was partially seasonal (but the decline over the last three months has been much larger than the usual decline).

It is possible the median price will be down year-over-year in a few months.

Existing home sales are being impacted by higher mortgage rates. Rates have increased sharply in October, and that will impact closed sales in November and December - so I expect further declines in sales later this year.