Existing-home sales declined 2.5 percent in August. The supply of homes for sale increased slightly to 4.2 months. 
Five Key Highlights
- Existing-home sales fell 2.5% in August to a seasonally adjusted annual rate of 3.86 million
- Sales are down 4.2 percent from a year ago and are down 39 percent from the cycle high of 6.34 million in January of 2022.
- The median existing-home sales price fell from $421,400 to $416,700.
- For the the 14th consecutive month, the median price is higher than a year ago.
- Unsold inventory sits at a 4.2-month supply at the current sales pace, up from 3.3 months a year ago.
Existing-Home Sales Percent Change from Month Ago
Existing-Home Sales Supply
The supply of homes is the highest in over four years.
Existing-Home Sales Percent Change from Year Ago
Sales were falling so fast that year-over-year numbers were increasingly easy to beat. But things reversed lower after getting to -1.7 percent year-over-year.
From a year ago sales are down 2.5 percent. Sales are down 39 percent from the January 2022 high.
Existing-Home Sales 1968-Present
I repeated last months chart. The August 2024 sales are 3.86 million seasonally adjusted annualized.
Existing-home sales are below the level of December 1995 and also May 1979.
Adjusted for population, these are abysmal numbers.
Stronger than Expected Housing Starts
Yesterday, I noted Stronger than Expected Housing Report in August, Especially Completions
New home sales for August have not yet been released.
Every year in May/June houses for sale days on the market cave in. If by May/June next year Fed Rates will drop by 1.5%/2% transactions might rise above zero y/y.
In recession transactions might drop further to the mid 1990’s level to the S&L crisis trading range. But if a systemic change plagues single homes they will drop further to the 1983 level, bc Land/single house cost more than Land/multi apartments.
Gross monetization of debt has advantaged those US citizens with assets, inflating held asset prices. The new entries into the service economy have (slowly inflating) wages that can barely afford rental prices, with housing prices unattainable even if mortgage rates fell to 3-4% and prices somehow didn’t increase. That is a critical rub with the American service economy.
Getting more difficult to find bad economic news to justify the fed’s 50 basis point cut in the fed funds rate except to ensure an equity market melt-up to new highs.
Mission accomplished powell. Why not tell the truth?
Hard to wrap my head around the fact that the annual rate is 2.5 million less than it was just 2 1/2 years ago. That’s Bidenominics!!!
January 25th cannot get here soon enough.
In the end, if your mortgage is paid off, the kids are on their own and you like the area there is no reason to sell your home; absolutely no reason at all.
For the most part that’s true.
Unfortunately, skyrocketing property taxes and insurance can force you to leave even if the mortgage is paid off.
That can happen but since seniors are not selling it confirms that that is not a problem big enough for most of them to downsize.
I don’t know about anyone else here, but I get the impression the Fed’s 0.5% is a panic move. The sudden change in strategy speaks volumes.
More information is better than less information, and the Fed is INFORMED better than anyone.
‘We’ don’t have access to real-time accurate data. The Fed does. For example, those truck-weighing stations on the interstates measure weight carried–think about daily reports of freight weights. Credit card companies track sales volume daily. Or the vast amount of financial data coming from banks, in the US and globally… and many other sources..
Are there more bank failures on the horizon? The Fed would know. .
I suspect the only way the Fed can enable the 0.5% cut in rates is by QE. Which means inflation with a vengeance, and loading up the balance sheet at a time when things are getting worse globally..
The Fed’s balance sheet:
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
Yep. Good times.
The Fed explicitly retained in yesterday’s language that they are continuing QT on steady course.
Also, the Fed has made it clear historically that they don’t have any “crystal ball” information not available to the market. In fact they sometimes remain ignorant of relevant developments – witness Sahm’s failure to replicate McKelvey’s recession indicator.
As for bank failures – surely you jest! The Fed couldn’t see SVB when it was right in front of them. Their so-called “stress tests” never stress the right things hard enough. And 2007-2008 was an all-you-can-eat buffet of Fed farces.
It’s going to be very painful to your portfolio if you continue to assume that the Fed knows something that the market isn’t discussing, other than sneak previews of embargoed government data that we’ll get in just a few days.
There are two economies. Those that focus on profits are doing just fine, the others are not.
https://www.cnbc.com/2024/09/19/august-home-sales-drop-more-than-expected-as-prices-set-a-new-record.html
So the 750k buyers are focused on profits and the below 500k are not. This is what you are saying?
I suspect he doesn’t know what he’s saying. At a guess, I’d say there is at least one standard deviation between $500K and $750K.
Different markets. Different buyers.
He’s presuming that people who are buying 750K homes are raking in profits while those buying 500K homes are not.
There is indeed 2 economies as Mish has been pointing out for the better part of this year. Those who already own a home and are moving to another home are more or less fine because you are swapping a 750K home for a 750K home so it’s a net zero type thing (or a small profit if downsizing in retirement or a small mortgage if upgrading due to a growing family). Those who are renting are not fine because prices have moved away from what they can afford due to the spike in housing prices.
Old Geezers not selling their house to then see their life-savings go up in smoke, stolen by senior living / assisted living private equity hoodlums.
Pilllows needed for grandma
Somehow, I doubt ‘old geezers’ are the problem, but easy for uninformed younger generations to criticize. More likely, they’ve locked in loans at low interest rates.
Here’s the issue: A prolonged period of Fed-subsidized at-near-zero interest rates loans is a first. Fed-induced inflation caused home prices to rise in the extreme, and its current strategy won’t make things any better.
The takeaway: the Fed created a lose-lose, with win-win in the very-short term for Wall Street. What is happening in other countries is a sign of what is to come to the US. As in 2007-9, the key to surviving is finding investment strategies that preserve wealth, and make more of it.
BTW, housing prices are notoriously sticky on the downside. Smart buyers will wait.
Would you prefer that the old geezers give their money to you? Why would they want to do that?
I ‘m in agreement with both of you. Maybe should have worded it differently.
I sold mine and married a younger woman Done
I suppose that may be true in some regions. IMO, however, old people prefer to stay in their homes more than going to a senior living facility. What I have seen in South Florida is that after the housing crises many people defaulted on their mortgages and a few years later they went and bought again at lower prices (higher interest and down payment). Then, when the Fed dropped the interest they refinance at a very low rate. A few years later the pandemic gave people an incentive to move south (working from home is better if the beach is near by). Add the influx of foreigners from all over the world with tons of cash (probably ill gotten) and no checks on money laundering ever in real state transactions drove demand through the roof (all cash transactions at the ask or higher). All this means that people (old and young) are sitting in an overpriced home at low rates so they will wait for their ask unless they need to move.
Allstate Now Increasing Home Insurance Rates in California By 34%https://franknez.com/allstate-now-increasing-home-insurance-rates-in-california-by-34/
Home prices must adjust lower
Not really surprise. Existing homes have lower or no mortgages. They are also being priced way above new construction (you can see in Zillow). So people in a home with low or no mortgage that do not need to move are sitting it out until they get their asking. They may or may not depending on how many new houses are being built. My guess is that in most regions new construction will get most buyers. So investment idea would be home builders.
“So people in a home with low or no mortgage that do not need to move are sitting it out until they get their asking. “
An excellent description of one of my neighbors.
It doesn’t really matter if they sit on their low mortgages because most people buy a similarly overpriced house when they sell an overpriced house and have no net impact on the amount of housing for sale, but it can sure look like demand at a price.
Insurance salesman
Looney Tunes | Daffy Tries To Scam Porky | Classic Cartoon | WB Kids (youtube.com)