Following yesterday’s dismal housing starts and building permits prints (which followed an ugly homebuilder sentiment signal), analysts expected US existing home sales to tumble 5.2% MoM in November. In fact, things were worse with a 7.7% MoM plunge (the biggest drop since Feb 22 and the 10th straight monthly decline). This is the biggest YoY drop since Lehman and the longest streak of sales declines since 1999…
Absent the COVID-Lockdown collapse, this is the lowest existing home sales SAAR since Nov 2010 at 4.09mm…
This disappointing drop in existing home sales happened despite the fact that mortgage rates have now fallen for 5 straight weeks…
Under the hood, the West saw the biggest drop in sales…
Existing-home sales in the Northeast trailed off 6.6% from September to an annual rate of 570,000 in October, a decline of 23.0% from October 2021. The median price in the Northeast was $408,700, an increase of 8.0% from the previous year.
Existing-home sales in the Midwest retracted 5.3% from the previous month to an annual rate of 1,080,000 in October, falling 25.5% from the prior year. The median price in the Midwest was $274,500, up 5.9% from October 2021.
In the South, existing-home sales declined 4.8% in October from September to an annual rate of 1,980,000, a 27.2% decrease from this time last year. The median price in the South was $346,300, an increase of 8.0% from one year ago.
Existing-home sales in the West waned 9.1% from September to an annual rate of 800,000 in October, down 37.5% from one year ago. The median price in the West was $588,400, a 5.3% increase from October 2021.
But prices remain higher as there appears no pressure to cut (i.e. few liquidations yet).
The number of homes for sale fell to 1.14 million in the month, the NAR data showed. While there tends to be fewer listings of homes in November and through the winter months, Yun said inventory remains near historic lows.
Given the slower sales pace, it would take 3.3 months to sell all the homes on the market, up from 2.1 months a year earlier. Realtors see anything below five months of supply as indicative of a tight market.
The median selling price was up 3.5% from a year earlier to $370,700. That’s the weakest appreciation since 2020.
The most expensive end of the housing market saqw the biggest sales declines…
“The residential real estate market was frozen in November, resembling the sales activity seen during the Covid-19 economic lockdowns in 2020,” Lawrence Yun, NAR’s chief economist, said in a statement.
“The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes.”
Properties are remaining on the market for longer – 24 days in November compared with 21 days in October and 18 days a year ago. Some 61% of homes sold were on the market for less than a month.