- by New Deal democrat
Existing home sales have been flat in the general range of 3.85 -4.10 million annualized for two years, and that continued in January, as on a monthly basis sales decreased -4.9% to 40.8 million from an upwardly revised December number of 4.29 million annualized:
The slightly better numbers in the past few months are of a piece with the slight uptrend in housing permits and starts we saw earlier this week, likely driven by recent lower mortgage rates (which have now ended).
Earlier in 2024 we saw a deceleration in the YoY% change in prices, but that reversed in autumn, as after a 4.0% YoY increase in October, the pace re-accelerated and in December prices were up 6.0%. In January that moderated to up 4.8% YoY, but considering that January is typically the low for annual prices, as shown in the below graph which shows the non-seasonally adjusted data, there is no sign of any real moderation in that trend:
Finally, there has been a decade-long trend of lower inventory than in the past. That trend accelerated during the COVID shutdowns. After briefly turning negative YoY in early 2023, making a low of -3.0% YoY that May, inventory has gradually turned higher. Typically December and January are the annual lows in inventory. In January inventory increased to 1.18 million from December’s low of 1.15 million. This is the highest inventory for January since 2020 (note: graph below is not updated through January)::
This contrasts with the low of 860,000 in January 2022, vs. the best January level in the past 10 years of 1.86 million in 2015.
As was the case last month, in summary on a non-seasonally adjusted basis sales, prices, and inventory were all up from one year ago, meaning that the market is continuing to slowly recover from the pandemic collapse. The continuing issue is whether enough supply will come back onto the market to allow competition to attenuate YoY price growth that has made existing homes relative to new homes relatively speaking the least affordable ever.
