- by New Deal democrat
Sometimes there just isn’t much drama in economic numbers, and that was certainly the case for this month’s edition of existing home sales.
As a mild refresher, even though they constitute about 90% of all housing sales, existing sales are not nearly so important as new home sales, since the latter involve much more economic activity in the building process, plus more landscaping and furnishings. As a further refresher, for the past several years existing home sales have been narrowly rangebound.
And they remained rangebound in March. Although the declined -3.6% for the month, at 3.98 million annualized, they remained well within their 3 year range of 3.85 million to 4.35 million. The negative here is that this range is also well below their pre-COVID range, shown in this 10 year graph:
Meanwhile, similar to the sideways trend in prices in both the FHFA and Case Shiller repeat sales indexes, on a YoY basis prices were only up 1.4%:
And although I won’t bother with the graph today, recall also that the median price of new single family houses has been trending slightly *downward* for the past several years.
With both sales and prices more or less in stasis, it is no surprise that inventory only crept upward at a very slow pace, up only 3% YoY. Here is the 10 year graph showing that while inventory has mainly recovered from its post-COVID lows, it is still only about 80% of what it was in the several years before 2020:
In short, the housing market seems to have reached a post-COVID equilibrium, with the big unfortunate aspect that the US needs much more housing to be built in order for it to be as affordable as it was before (actually, several decades before) COVID.
