US Existing Home Sales Are Crashing At Their Fastest Pace ‘Since Lehman’
The first glimpse of October’s housing market (after September’s slump) is not a pretty one as US existing home sales in October collapsed 5.9% MoM (slightly better than the 6.6% expected). That is the 9th straight monthly decline in sales.
This monthly decline pushed the year-over-year drop in existing home sales to -28.4% – its worst level since 2008!
Absent the nadir of the COVID lockdowns, this is the lowest existing home sales SAAR since Dec 2011…
“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said NAR Chief Economist Lawrence Yun.
“The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”
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.
“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added.
“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%.“
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.
Finally, we note a potential silver lining for November data as mortgage rates plunged by nearly a half-percent this week, marking the largest week-over-week decline since November 1981. The rate on the average 30-year fixed mortgage fell to 6.61% from 7.08% the week prior, according to Freddie Mac, which this week changed its methodology calculating rates.
The drop follows a sharp decline in the yield on the 10-year Treasury last week after a government showed inflation cooled last month.
All-cash sales accounted for 26% of transactions in October, up from 22% in September and 24% in October 2021.
Fri, 11/18/2022 – 10:08