The National Association of Realtors (NAR) reports Existing-Home Sales Slumped 5.9% in October
Existing Home Sales Key Points
- Existing-home sales faded for the ninth month in a row to a seasonally adjusted annual rate of 4.43 million. Sales fell 5.9% from September and 28.4% from one year ago.
- 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 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.
- Properties typically remained on the market for 21 days in October, up from 19 days in September and 18 days in October 2021. Sixty-four percent of homes sold in October 2022 were on the market for less than a month.
- “In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%,” according to Lawrence Yun, the NAR chief economist.
- First-time buyers were responsible for 28% of sales in October, down from 29% in both September 2022 and October 2021. NAR’s 2022 Profile of Home Buyers and Sellers – released earlier this month – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
Existing-Home Sales Month-Over-Month
The last month-over-month increase in existing home sales was January. For nine months sales have declined.
Existing-Home Sales Supply
Supply of homes for sales declined in October but at the current rate of sales, the month’s supply rose.
Month’s supply at the current rate of sales has risen 8 of the last nine months and the other was flat.
Existing Home Sales Crash
- Existing home sales are down 28.4% from one year ago.
- Existing home sales are down 31.7% since January.
That’s a crash. And never have we seen such declines other than in recessions.
Buyers and Sellers Strike
The annual share of first-time buyers was 26%, the lowest in NAR tracking history.
Buyers are on strike because they cannot afford the combination of price and mortgage rates.
Sellers are also on strike. They hope to get prices they could have received a year ago.
NAR Cheerleading
NAR cheerleader Lawrence Yun made this amusing statement: “Mortgage rates have come down since peaking in mid-November, so home sales may be close to reaching the bottom in the current housing cycle,” Yun said.
Buyers went on strike in February with the average 30-year mortgage rate at 3.7 percent. The average rate is now 6.65 percent down from a peak 7.37 percent.
Is 6.65 percent really going to lead to a buyer’s splurge heading into if not in recession?
Housing Starts and Permits Swing to More New Lows For This Cycle
Meanwhile, please note Housing Starts and Permits Swing to More New Lows For This Cycle
And it is single family units, not apartments that are leading the decline. Homes are not affordable.
US Treasury Yield Curve Is One of the Most Inverted in History
Also note the US Treasury Yield Curve Is One of the Most Inverted in History
This is a strong recession signal.
The Fed actively seeks to pop the housing bubble that it created. Given policy acts with a lag, the Fed is likely to overshoot with a policy error in the opposite direction.
Is this anyway to run a country or a business?
This post originated at MishTalk.Com.
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Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a net loss of $624 on each loan they originated in the third quarter of 2022, down from a reported loss of $82 per loan in the second quarter of 2022, according to the Mortgage Bankers Association’s (MBA) newly released Quarterly Mortgage Bankers Performance Report.
“The average pre-tax net production income per loan reached its lowest level since the inception of MBA’s report in 2008, which is sobering news given that the third quarter is historically the strongest quarter of the year,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The industry continues to struggle with a perfect storm of lower production volume and revenues and escalating production costs, which for the first time exceed $11,000 per loan.”
Added Walsh, “Companies are responding to tough market conditions by reducing excess capacity, including staff. The number of production employees per firm is down 7 percent from the previous quarter and 19 percent from one year ago. However, overall volume has dropped so swiftly that some companies are having difficulties adjusting staffing and other costs to match market conditions.”