Existing-home sales are at the lowest level since 2010, down 18 of the last 20 months.
The National Association of Realtors® NAR® reports Existing-Home Sales Decreased 2.0% in September.
Key Details
- Existing-home sales slid 2.0% in September to a seasonally adjusted annual rate of 3.96 million. Sales retreated 15.4% from one year ago.
- The median existing-home sales price grew 2.8% from one year ago to $394,300, marking the third consecutive month of year-over-year price increases.
- The inventory of unsold existing homes climbed 2.7% from the prior month to 1.13 million at the end of September, or the equivalent of 3.4 months’ supply at the current monthly sales pace.
- The median existing-home price for all housing types in September was $394,300, an increase of 2.8% from September 2022 ($383,500). All four U.S. regions posted price increases.
- “For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply,” said NAR Chief Economist Lawrence Yun.
- First-time buyers were responsible for 27% of sales in September, down from 29% in August 2023 and September 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
Existing Home Sales Seasonally Adjusted
Existing home sales are down 37.5 percent in less than two years.
Home sales were 6.34 million in January of 2022 at a seasonally-adjusted annualized rate. They are now 3.96 million.
This is a transaction crash.
Existing-Home Sales Month’s Supply
Supply of homes just exceeded the November of 2022 high, up or steady for 7 consecutive months. Yet, median price keeps rising.
Existing Home Sales Since 1969
Yes, This is a Crash
- Existing-home sales are down 37.5 percent in less than two years.
- Existing home sales are back to a level seen in the mid 1970s.
- This is a transaction crash, not a price crash.
Prices have not crashed but transactions have. Crashes are rare, but we are in one now.
People who want to move are effectively trapped in their houses because they do not want to trade a sub-3% mortgage for a 8.0% mortgage.
This crash is likely to last longer because intertest rates are likely to stay higher for longer because the Fed fears stoking more inflation.
Home sales mean appliance sales, new furniture, cabinets, new carpet, landscaping, etc. Who doesn’t spend a lot more money when they move into a new home?
Yet, from a price perspective, the bubble is still expanding.
The Housing Bubble Is Expanding Again
As with the previous chart, for 12 years, home prices, rent, the overall CPI and hourly earnings all rose together. That changed in 2000 with another trendline touch in 2012.
How Much Are Homes Overpriced?
If the 12-year trend of home prices rising with average hourly earnings stayed intact, the home price index would be 211, not 308.
From that we can calculate home prices are ((308-211) / 211) percent too high, roughly 46 percent too high. If you prefer, home prices would need to fall ((308-211) / 308), roughly 31 percent.
Alternatively, if home prices stagnate for years, wages may eventually catch up.
How the Fed Destroyed the Housing Market and Created Inflation in Pictures
For discussion of this dual-track housing bubble with rising prices despite a transaction crash, please see How the Fed Destroyed the Housing Market and Created Inflation in Pictures
The bubble: in June 1949 the Dow was 161.60, In 1966 it was 1,000. The Dow
breached 1929 high in 1953, 34 years later. Those who lost money in the depression bought in 1949, in phase I : Du-Pont, Anaconda, Johns Manville, Studebaker…
Phase II : between 1954 and 1957 low @416.15.
Phase III : Nicolas Darvas, a Hungarian immigrant, a night club tango dancer made 2M. Davas bought : Alcoa, US Steel, Bethlehem Steel, Kenametal, Raytheon, American Motors, Polaroid, Bell & Howell, Lorillard, Diner’s Club,Thiokol (NOC), Texas Instrument, Faichild Camera, Zenith Radio…
Phase IV : He bought a house.
The DJIA is why my post-war dollar is really worth over $205 in 2023?
The same people who can’t afford homes are the same ones who vote for polices that raise the costs. Property taxes are through the ceiling around here but they keep voting for new HS football stadiums, new HS art centers, raises for firefighters, police, teachers, lunch ladies, bus drivers, homeless shelters…meh. I have zero empathy for them. They did it to themselves. They recently voted for an olympic size pool for a HS. Insane.
Sounds like you need to move where there aren’t any people living nearby…
Or any Children whatsoever!!…
Or move where there’s absolutely no growth….
and no future!…
Where everybody can “Just Stay OFF Your Lawn!!!”…
Nah, just move to where they borrow more money whenever they want something. The kids will be good for it. What could go wrong?
good stuff. of course i always like to keep it simple. is the 100 dollar benjamin in my wallet worth anything close to what it was in 2011 low when i stocked up on rental units. how about in 1999 tech bubble high. glad i sold my rentals. r/e requires much patience and a niche. the governments are going bust. the free billions from freshly printed trillions during covid handed out to states ain’t happening unless your state is israel or ukraine. this smells like the 70s, but our empire is weaker and also more over extended propping up disgusting regimes like israel and ukraine………….watch out below…………this ride will be long. 5 to 20 years is my guess…………all empires crumble.
Nah, the Dinosaurs died off because of cataclysmic change. The earth moved on…
The Soviet Union died off…and most of Eastern Europe moved on…
Now the Russian Federation is in the process of dying off…and more of Eastern Europe and Central Asia will move on…
Real Estate rentals are still profitable if well managed…that will continue in most areas…the market will continue to move on…
Grumpy old farts that have been talking about “empire collapse” for decades will die off too…just like they have for decades…the rest of us will continue to grow and move on..
Millions of old Boomers will accelerate the rate that they begin dying off…and their kids will take over their wealth and their ”stuff” and the numbers of houses sold off will accelerate…and the country will move on…
Complain all you want…you too will eventually die off…and the rest will continue to move on…
Cheers!
It’s not the 1960s and the real estate market has changed so perhaps it’s time to update the real estate models because yes, this time, it is different.
How many foreign home buyers existed in 1960 vs today?
How many home buyers were AirBnB buyers in 1960, ’70, ’80?
How many home buyers were long term rental buyers in 1960, ’70, ’80?
How many home buyers were wealthy second or third home buyers in 1960, ’70, ’80?
How many home buyers were corporate home buyers in 1960, ’70, ’80?
How many home buyers were hedge funds buying up homes in 1960, ’70, ’80?
The real estate market matrix has changed. I will say that again so it sinks into some of the thicker skulls here, THE REAL ESTATE MARKET MATRIX HAS CHANGED!
We aren’t going back to the 1960s in any way shape or form. Anyone buying a home today needs to calculate potential net present value and cash flows in order to make sure they won’t get hosed down the line but even then it’s a risk with exploding insurance, taxes and maintenance costs.
If everyone is waiting for interest rates to go back down to 3% to buy then what do people here think will happen as soon as they hit 3%? Heck as soon as the mortgage rates go down to 6% everyone will jump in and buy on the assumption rates will keep going down and they can refinance later. Either way values will explode again if rates go down.
It’s a whole new paradigm now, anyone that truly wants to own a home they will find a way by sacrificing in other areas. Those that don’t really want to “own” will rent accordingly.
And home ownership is going to be a lot more expensive moving forward. I consider the article below karma for anyone that doesn’t believe in climate change. Insurance companies believe in it and are charging through the roof (pun intended).
link to wsj.com
I do not know a single person that can buy the home they live in on their current incomes. NOT ONE.
One buddy made this remark. “I couldn’t even afford just the taxes if I bought this home today”
And then, there is Canada. Multiply everything by at least two.
We know three couples in our Resort Town who have TRIED to sell existing homes, to escape the Cold Winters, and we LOW-BIDDED and the houses are still listed. They HAVE low interest rates but bids are DROPPING.
Thus, MISH, part of these Government Narratives are LIKELY, and I am guessing, PROPAGANDA.
What does “low bidded” mean? You mean someone bid less than 20% of the all time high price which is still up 200% from the 2008 lows?
Remember 2008? How everyone noted how insane that all was and prices were completely ridiculous and now 2008 looks like a little blip on the price chart.
WHAT’S CHANGED? Folks are NOT making 200% more than they did in 2008 AND the median individual income in the USSA is $40K.
The only question I have is are these folks going to get bailed out AGAIN??
“WHAT’S CHANGED?”
People know that The Fed will keep making up “liquidity” programs to ensure holders can sit on mortgages for at least 3000 years without getting as much as a single payment, before they have to sell.
While also handing near infinite loot to “investors” who are also guaranteed against ever taking a loss, no matter what they pay, for as long as The Fed remains in existence. It’s what the idiotonomists refer to as “saving” the housing “market.”
No bank will ever need to take a loss on a mortgage. They can instead just sit on it forever. Or, sell it to some Fed shop like Blackrock. Who also knows that they will never have to take a loss, no matter how much they overpay. So, noone sells. Since they all know, that all they have to do is wait until the bailout comes, and they’ll be made whole and more. And, of course, they also all know that noone else will be allowed to build anything else in the meantime. So the decaying shacks they have been sitting on for the past 3000 years of ever rising homelessness; will still remain the only ones for sale 3000 years later.
That’s just how fully financialized, 100%, dystopias “work.”
Say you have NO clue what actually happened in the Housing Crash…without actually saying it.
A SHITETON of people lost their houses. A SHITEton of people lost their lives savings and a SHITEton of people have NEVER recovered financially from that time.
Part of the reason that the homelessness situation continues to get worse is people are being priced out of markets, losing their homes, not being able to afford rent. As clearly shown by the charts. Income hasn’t even close to kept up with the prices of shelter.
“Part of the reason that the homelessness situation continues to get worse is people are being priced out of markets, losing their homes, not being able to afford rent.”
ALL of the reason for ANY “homelessness situation”, is that too few houses are built. And the only reason for that, is that people who don’t have a house, or who have one but want a second one or a nicer one, are restricted from just building one. Building houses has been well understood, cheap and simple since pretty much forever by now.
“A SHITETON of people lost their houses. A SHITEton of people lost their lives savings and a SHITEton of people have NEVER recovered financially from that time.”
If some backmarker’s “life savings” consists of borrowing hundreds of thousands, to hand over to some hack in exchange for a tens-of-thousands shack; which from that day onwards sits there and further decays: Losing said “savings” is exactly the economically efficient, hence ideal, thing which could happen. No different from how overpaying a million bucks for a cellphone, which anyone sentient also realises simply decays and is rendered ever more outdated as it sits there, will also result in losing one’s savings..
This is the fate of ALL manufactured goods.Phones, houses, anything. They decay over time. Hence become less valuable than they were as new. None of them, ever, magically create value simply sitting there.
A totalitarian government bent on preventing it’s favoured class of well indoctrinated morons, from having to bear the inevitable consequence of acting this financially idiotically, is exactly why all that is left in America is homelessness, joblessness, lack of competitiveness, backwardness, cluelessness and increasingly even outright foodlessness. Just so that complete illiterates can continue to run around pretending to “make” money off of “investing” a million borrowed dollars into a cellphone, car, house or any other manufactured, decaying and aging, hence depreciating consumer good.
A house is a consumer good. It costs to have it built. After which is loses that value year over year. In the meantime it provides for the consumption of the good which is shelter. Nothing more.
Only the most economically illiterate of morons, can be suckered into falling for anything so trivially nonsensical as a “house” being some sort of magical, tooth-fairy like, create-value-out-of-thin-air device. And the only possible outcome of any government attempt to try to bail out such obvious idiocy, is exactly the decay which is all America has experienced since the idiocy got going completely unchecked, in 1971.
Wow! You CLEARLY don’t know what you’re talking about.
Most Houses come with LAND Ownership. They have VALUE in the LAND not just the structure. Clearly you’re too foolish to know that.
There’s literally no valid comparison with a House on LAND, which has VALUE, especially in high demand areas…and a mobile phone.
Dumbest take I’ve seen on this forum…so you’ve got THAT going for ya.
Houses ALSO are often Durable Structures that last decades and (because they are on land that has value) tend to go UP in price over the course of a few decades, way more than the maintenance required to keep them running.
You don’t need houses to go up in value dramatically each year like Boom Markets to have the value / equity be created over decades. I KNOW this directly. I’ve owned LOTS of rental properties.
Even average middle class people over time can accumulate a few rental properties simply by buying houses well within their means…paying down their mortgages over time… keeping their old houses as rentals…and building up massive cash flow and equity. It’s NOT Rocket Science. You can do that in many neighborhoods
There are LOTS of reasons for homelessness. Skyrocketing Medical Bills is the number one reason for bankruptcy in this country. Not just “we haven’t built enough houses”.
While I agree absolutely with the fact that there should be more MANY more houses / townhomes, apartments, etc. built,
especially at smaller sizes and more reasonable starter home prices, that’s not the only answer to homelessness.
It would definitely make the the problem less severe.
A major way to pass down wealth in this and many other countries has been inherited real estate. Managed well produces both Income AND Wealth.
Employers cannot fill the positions they need because talent cannot afford to move. This is especially true for high cost of living areas like Connecticut, California, New York, Hawaii, and Illinois. Employers may start paying a portion of mortgages for new hires. Employers are more likely to hire foreigners who are accustomed to apartment living.
Funny you say that. My wife was offered a job on the Big Island of Hawaii, near Kona. Pay was pretty good, low 6 figures. After I went on Zillow to try to find a place, I put in 200k-300k and nothing was popping up, I figured something was wrong. LOL, there was nothing livable for less than 400k, and apartments were just insane, a 250 sq/ft studio was about 1k a month. Well, she turned it down as there was no way we could afford it, so that dream of living in Hawaii is over, but it was fun for the hour or so it lasted!