Friday, November 18, 2022

Existing home sales decline to recessionary levels; prices have clearly turned down; low inventory still a problem


 - by New Deal democrat

As I wrote earlier this morning, my primary interest in existing home sales at this point is prices. [Note: graphs below for sales and prices does not include October]

For the record, existing home sales fell to a new 2.5 year low (i.e., since the teeth of the pandemic lockdowns) of 4.430 million annualized:

Before the pandemic, the last time the number was this low was in 2012. Further, this is down -19.5% YoY, -26.4% from their recent secondary February high, and -35.3% below their October 2020 expansion high. This is the kind of number I would expect at the cusp of a recession.

More importantly, median prices declined seasonally by -1.5% for the month to $379,100. This is “only” 6.6% higher than one year ago, and is the slowest YoY% increase in over 2 years:

The highest YoY% change in the past 12 months was +17.6% in January.  This is the third month in a row that the rate of change has declined by over 50%, my rule of thumb for when a seasonally-adjusted data set would turn down. 

In short, I think we can safely say that existing home prices, were we able to seasonally adjust, have turned down from a peak during summer.

Inventory is also not seasonally adjusted. This turned down m/m, but YoY is -0.8% lower:

We are nowhere near solving the low inventory problem that we have had since even before the pandemic hit.