Lawrence Yun is singing an optimistic tune on interest rates but cites the election as a factor.
The National Association or Realtors (NAR) reports Existing-Home Sales Slide 1.0% in September
Five Key Highlights
- Existing-home sales descended 1.0% in September to a seasonally adjusted annual rate of 3.84 million. Sales dipped 3.5% from one year ago.
- The median existing-home sales price climbed 3.0% from September 2023 to $404,500, the 15th consecutive month of year-over-year price increases. All four U.S. regions registered price increases.
- Total housing inventory registered at the end of September was 1.39 million units, up 1.5% from August and 23.0% from one year ago (1.13 million). Unsold inventory sits at a 4.3-month supply at the current sales pace, up from 4.2 months in August and 3.4 months in September 2023.
- First-time buyers were responsible for 26% of sales in September – matching the all-time low from August 2024 and November 2021.
- All-cash sales accounted for 30% of transactions in September, up from 26% in August and 29% in September 2023.
Cheery Spin from Lawrence Yun, NAR Chief Economist
“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” said NAR Chief Economist Lawrence Yun. “There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy. Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”
“More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” Yun said.
“Moderating home price increases are welcome news for home buyers,” Yun added. “With wage growth now outpacing home price appreciation, housing affordability will improve.”
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 3.5 percent. Sales are down 39 percent from the January 2022 high.
Existing-Home Sales 1968-Present
I repeated last months chart. The September 2024 sales are 3.84 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.
Reflections on Yun’s Cheerleading
Inventory is up six times in the last seven months, with the other flat.
If it was a matter of inventory, home sales would be increasing.
Yun mentioned mortgage rates are down from a year ago. He blames sales on the election. What a hoot.
He also failed to note that mortgage rates are up again today to 6.92 percent according to Mortgage News Daily.
That’s up from 6.11 percent on September 11.
Mortgage rates dropped below 7 percent on July 10. It did not do a damn thing for existing-home sales. And now rates are nearly back to 7 percent and Yun is telling us falling mortgage rates will help sales.
That’s another Yun hoot and he’s provided many over the years.
Meanwhile, first-time buyers were responsible for 26 percent of sales in September, tying the record low.
Living Paycheck to Paycheck
Yesterday, I noted 20 Percent of Households Making Over $150,000 Live Paycheck to Paycheck
And if you factor in discretionary spending, over 40 percent live PTP.
The hidden cost of homeownership is one of the reasons.
New Record Highs on Home Prices
On September 28, I commented Yet Another Record High for Case-Shiller Home Prices
I have been talking about housing since the start of this blog in March of 2003. The Fed keeps making the same mistake over and over.
Fed Hubris
Flashback March 4, 2021: Fed Hubris: Housing Prices Show the Fed is Making the Same Inflation Mistake
Prior to 2000, home prices, Owners’ Equivalent Rent (OER), and the Case Shiller national home price index all moved in sync.
This is important because home prices directly used to be in the CPI. Now they aren’t. Only rent is. Yet, OER is the single largest CPI component with a hefty weight of 24.05% of the entire index.
The BLS explains this away by calling homes a capital expense not a consumer expense.
However, that explanation ignores easily observed and measurable inflation. And it’s inflation, not alleged consumer inflation, that is important.
A $150,000 House in 1988 Now Costs $707,500 Thank You Fed
Using Case-Shiller data of repeat sales, on August 10, 2024, I noted A $150,000 House in 1988 Now Costs $707,500 Thank You Fed
End the Fed
End the Fed was idea was a discussion focus on this blog and the Mises Institute in a series of recent posts.
Please see Fed “Playing With Fire” Take Two, Who Starts the Business Cycle? for a discussion of ideas and alternatives on ending or reigning in the Fed.
Hello Mr. Yun
Hello Mr. Yun, homes are not affordable and your cheerleading won’t make it so.
of course the NEW buyers on own law has nothing to do with it
caveat emptor without REALTOR in pocket – it’s cheap insurance
it’s cheap insurance
Renters will indeed be the loudest voice in 2 weeks.
…or maybe existing housing stock is simply overpriced & unaffordable…
…and new housing construction is wildly overpriced & beyond consideration.
Any wonder these numbers are so dreadful under Kamala’s leadership? Mortgage payments for the same house under Harris are more than double what they were under Trump. And now she is going to make houses cost $25,000 more.
She is focused on people of color and wants to help them buy homes in this market.
Does sunburned count?
It isnt just the Democrats fault, Its the Republicans including Trump also. When Trump was president he told Powell to do QE/push down rates with money printing. These low rates fueled the cheap debt speculation that drove up housing prices.
And to think that realtor’s pay this quack’s salary.
It’s not Russia?
Of course it’s Russia! It’s always Russia! Because Putin is Hitler. Also, Trump is Hitler. And Elon Musk is Hitler. And JD Vance is probably also Hitler.
Lawrence Yun is one of the worst economists I have ever read. If I was in the NAR, I would protest paying membership fees to fund his salary.
Yun : economics as Fauci : medicine
PR guys talk. Their profession is to say what others tell them to say.
The real news today was Apple cutting iPhone production by 10 million units. The recession is almost officially here.
https://www.cnbc.com/2024/10/23/apple-analyst-kuo-says-company-cut-iphone-16-orders-10-million-units.html
Glad I sold off stocks last Friday. I think things are about to get ugly. IWM down 1.33% today. Looks like all those calls I sold will expire worthless 😉 …$….$
Forgot to add this reference link. ….
https://mishtalk.com/economics/37-percent-have-maxed-out-a-credit-card-or-nearly-so-since-fed-rate-hikes/
My guess is sales in China are cratering as the Chinese government is strong arming citizens to purchase Chinese phones over iPhones. The market there is SO large that even a small push will crush iPhone sales numbers like it’s doing to Tesla car sales.
Never mind that Chinese phones caught up with Apple “innovations” to say the least.
I was impressed by Huawei phones almost a decade ago, so how much worst could it be now?
Probably just a result of Apple innovation: removing yet another port, button or anything that distorts the smooth outline of their gadget.
But I am not worried, soon only voice commands will work by Siri listening on all conversations around it. /s
Personally vital items such as ones involved with moving us around and involved with giving us a roof over our heads are a major part of the inflation picture. Consumers have limited options when it comes to these two big-ticket items, their buying reticence a sign that their wallets are not infinitely expandable.
When a man steps into a new home, he feels a sense of pride, his emotion justifying the tremendous capital outlay he has just bought into. But is pride enough to outweigh inflation? During the Weimer Republic in Germany we saw true hyperinflation that dwarfs the post-Covid variety across the world. The difference being, today’s inflation is global, and the Weimerian version was strictly local, due to government officials mismanaging their finances.
Technically, there is no overriding reason to own a home. You can always, as a stopgap measure, rent a home for a while — or even slum it in an apartment, like hundreds of millions do. But the idea of home ownership remains a glimmering hope on the horizon for many, the costs are irrelevant and they simply must have this one big-ticket item. Better a life of paycheck-to-paycheck than another month in the dreary apartment. (You can read my writings by going to: dark-dot-sport-dot-blog … where each -dot- represents a period.)
The reason to own a home is to have a place to grow food, can food, store ammo, and short 20 year treasuries..
Rents significantly impact housing prices for first-time and lower-priced homes. Small remodeled homes are sold for 300 to 500 dollars per foot, increasing the prices of medium-sized housing. The payment for these refurbished homes of 900 to 2000 square feet is close to higher-end rentals. So why rent?
The NAR only makes money from percentage commissions on closed sales. They could boost sales by jawboning sellers to accept lower prices, which would bring out more buyers. But a 40% drop in prices coupled with a 20% gain in sales rate (to bring both in-line with historic norms) would be a net loss in revenue for them.
One might, however, expect a split in the real estate services industry, with businesses that charge flat fees advocating for lower prices, since that would increase their revenues through more sales volume.
Realistically what will most likely happen is an epic market meltdown with prices starting to fall, buyers therefore holding out for even lower future prices, and speculative sellers panicking and trying to get out before they lose their pants as well as their shirts…
He who panic’s first, panic’s best.
In other words the first people to take a less money offer on their home will do best because immediately that will reset the market for local comps which will put further downward pressure on home prices and get the much needed price drops happening. Those who keep holding out are going to end up further and further underwater or eating bigger and bigger losses.
NAR would tell you it’s a great time to buy even if an extinction level asteroid impact was confirmed to occur in 2 weeks.
That would truly be a great time to buy if you were going ‘no money down’ because you wouldn’t even have to make a payment 😉
Comparing like period for seasonal effect.
Oct 20 2016 5.47m
Oct 20 2017 5.81m
Oct 19 2018 5.34 m
Oct 22 2019 5.38 m
Oct 22 2020 6.54 m
Oct 21 2021 6.29 million
Oct 20 2022 4.71 m
Oct 19 2023 3.96 m
Oct 23 2024 3.84 m
Not a very promising Trend over last four years.
You get a gold star for providing data. See how data and math set your mind free. Keep it up in everything you do, even when you don’t like the truth.
What sets a mind free does not reside in the three dimensional world that everyone seems to think measuring of it has significance.
Yup. Over 2.5 million fewer houses are being sold than there were under Trump in 2020. Sucks for realtors, mortgage brokers, bankers, contractors, home improvement stores and the economy.
And it sucks even more for the millions who have been priced out of the housing market.
And these people represent a very significant part of the working age population. All earning less. Recession incoming.
thank you for that info………This blurb in the article caught my attention
Is this the Hedge funds and or other investment partnerships buying up and then they Airbnb it which takes even more property off the market so to speak which further drives up prices , whether to purchase or rent as less inventory on the market
And this guy probably can’t add 1 + 1 = 2.
The massive drop in home sales falls squarely on the back of JPowell. He CHOOSE to drop interest rates to near ZIRP and then held them low far too long. And, he CHOOSE to buy tons of MBS that pushed down mortgage rates to historic lows. JPowell alone is responsible for the housing morass that we find ourselves living through. And the only fix is a deep recession.
This situation will take many more years to sort out.
That and the enormous deficit spending by government, inflating cost of goods used in new Housing production which in turn drives existing Homes higher.
Powell was nominated by Obama, made chairman by Trump, and renominated by Biden. Thats partly why the Republicans and Democrats, who both support the Fed because they have monetized deficit spending, probably because the corporate campaign donors want it, are called the Uniparty. I hope more people are aware of that when they go to vote.
Helicopter Ben feels slighted by your comment.
$150k makes perfect sense, as that’s 3x median income. I’m still blown away how long price has been divorced from income….its the $1M dollar question…
$150K is <2x median household income in the US, which is over $80K/year.
Kant wait for Kamala. I identify as black and Hispanic so I will get the loans that are forgiven. Plus that first time buyer credit. Kould be lots of money coming my way as long as I stay on the plantation and never think for myself. Barack told me who to vote for. When has he been wrong?
Love the sarcasm
If you change your sex, the government will pay cash for your house. You’ll have 100% equity. Free house.