Existing home sales resumed their slide in March after two-month rally to start the year.
The NAR reports Existing-Home Sales Descended 4.3% in March
Key Highlights
- Existing-home sales retreated 4.3% in March to a seasonally adjusted annual rate of 4.19 million. Sales fell 3.7% from the previous year.
- The median existing-home sales price rose 4.8% from March 2023 to $393,500 – the ninth consecutive month of year-over-year price gains and the highest price ever for the month of March.
- The inventory of unsold existing homes grew 4.7% from one month ago to 1.11 million at the end of March, or the equivalent of 3.2 months’ supply at the current monthly sales pace.
- First-time buyers were responsible for 32% of sales in March, up from 26% in February and 28% in March 2023.
- Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in March, down from 21% in February and 17% in March 2023.
Existing-Home Sales Percent Change from Month Ago
Since February of 2022 existing home sales have only risen 5 out of 26 months.
Existing-Home Sales Supply
At the current rate of sales, the supply of homes for sale is 3.2 months.
Existing-Home Sales Percent Change from Year Ago
Data on the St. Louis Fed is limited. Year-over-year sales are down for at least 21 consecutive months.
At some point, year-over-year sales will rose but don’t make too much of it. It will be due to easy to beat prior year comparisons. The following chart puts sales into the proper perspective.
Existing-Home Sales Since 1968
Existing home sales have fallen to 4.19 million, about where they were in November of 1978.
The Civilian Noninstitutional Population (age 15+ not in the military or prison, etc.) was 132.9 million. As of March 2024 it was 267.9 million.
Adjusted for population growth, current sales are about 2.1 million annualized, close to the 1982 bottom.
Housing Starts Plunge 14.7 Percent
Housing starts plunged in March, but for the past year, it’s really a tale of two markets, single-family vs multi-family.
On April 16, I noted Housing Starts Plunge 14.7 Percent, Multi-Family Very Weak For a Year
Multi-family construction has collapsed 42.2 percent since January 2023.
In contrast, single-family construction is up 24 percent.
It seems builders have been adding too many apartments and/or financing is such that it makes no sense to build multi-family units.
That observations begs the following question.
When Will Housing Units Under Construction Impact the Price of Rent?
The number of housing units under construction topped 1.4 million in August of 2022 and has been there ever sense.
Yesterday, I asked When Will Housing Units Under Construction Impact the Price of Rent?
It’s a complex question with a lot of parts, but possibly we see some steeper year-over-year moves in rent prices starting May or June.
The title of my post says “Expect More Weakness”. That’s because mortgage rate are back well above 7 percent to 7.4 percent after having dipped to 6.6 percent in December.
Francois Trahan posted the following chart on X of housing rents. Trahan plots the Cleveland Fed’s New Rent Price Index (+9m) against CPI Rent Price Index. I interpret the chart as showing that rents have now troughed are about to swing higher. Current period looks similar to 2009. Cleveland All Tenant Rent index has flatlined just like in 2009.
link to twitter.com
@Mike, this isn’t going to go the way you think it will. High/rising rates are going to keep most existing inventory locked up because the majority of home owners took out mortgages during the ZIRP/QE period. This will keep inventory in check. Prices will rise. This happened during the 1970s.
link to twitter.com
Note the home prices continued higher during the 1980 and 1982 recessions.
This is an indication of the situation in China
Shipments to China, the second biggest market for Swiss watches, slid 42 percent, falling below levels seen in March 2020 when the industry came to a halt due to pandemic lockdowns. Shipments to Hong Kong plummeted 44 percent.
link to businessoffashion.com
Based on sales of existing homes, one would expect the economy to be in a recession
Not till after the election silly!
Yep, they are holding it together with chewing gum and duct tape until trump’s second day in office. Printing, programs and moratoria as far as the eye can see.
Go on, pull the other one then!
Hard to tell at this point. The prior big peak was in 2005, but the recession didn’t get started until the bottom was formed in late 2007. Are we at bottom yet? Can’t be sure from this data.
In any case, it is new-house construction & sales that drive the boom-bust cycle (actual production), not Realtor churn of existing homes. Right now homebuilding is fairly steady, it hasn’t crashed by 75% like it did from 2005-2008. In fact the current level of housing construction is only around the historical average level.
So far it seems like the only real recession is for Realtors and mortgage brokers.
Realtors are having to had their buyers a contract that says “I will pay you x percent” of what I purchase this house for. They want what they’ve always had… n = 3. I don’t think they are going to get that any more.
The most important takeaway: “ninth consecutive month of year-over-year price gains”.
In the hottest markets, prices are up more than 10% year over year.
Most areas of the country, including most of the midwest, are showing strong home price appreciation.
Boise, Austin and the Bay Area are exceptions to what is going on just about everywhere else.
So you claim prices (in those markets) are up 10%… how much are property taxes and insurance costs up by?
In many markets, the costs of holding a property is up by more than the prices, and those costs are due NOW as opposed to a theoretical price increase that may or may not be realized sometime in the future.
I call BS. Median-price data is useless for spotting market turning points. When the market turns, it’s the low-end properties that stop selling first, and that skews the median in the opposite direction of the way the market is turning.
The monthly Case-Shiller repeat-sales data shows prices are now heading down at the national level – a double top. Yes there are pockets that haven’t got the memo yet, but mortgage rates are heading upwards. With higher rates, buyers won’t be able to make the numbers work at current prices.
And once “prices are now dropping” filters into the market (despite the Realtors’ median-price propaganda), sellers are going to get a lot more motivated.
So sad to see an entire generation priced out of the housing market. Even worse, some car payments are bigger than house payments were just a few years ago. Any wonder so many young adults are living at home and not having children.
Car payment is the new house payment:
link to reddit.com
The problem isn’t so much pricing, it’s the property taxes on the inflated housing along with higher interest rates. If your in a state where your taxes are locked in at a lower rate your looking at your tax bill doubling or more if you move. I have no desire to pay 7k or more yearly in property taxes on a 250k home here in Michigan. I just don’t see the value for the services privided, particularly since a majority of the housing stock is already 50+ years old in my area. New housing at over 300k is pretty much unaffordable unless you have decent equity in an existing home.
Ben Bernanke saying housing prices have never gone down at the same time across all regions … Well, that was a leverage problem in the end. He was (mostly) right about regional differences so I think its difficult to paint the national brush.
Bernanke was the guy who said the subprime contagion was well contained. He is a clueless academic
Bernanke should have stuck to his studies of The Great Depression as his misguided policies fueled economic collapse causing the ensuing Great Recession.
Yes, that was the lead in. The point is not about Bernanke. The point is that regional housing differences are real with some markets showing a huge lack of supply and still going overbought-er, others not so much. Larry Fink, King of the Universe at BlackRock, was one on the early innovators of MBS, which then innovated to CDOs, which then, heck why not got innovated to CDO^2 etc. Beyond Ben being a putz, or paid to be a putz, it was the leverage behind the mortgages that was the shiv in the back of the economy.
If you read Michael Lewis’ book “Liar’s Poker” about the old Solomon Bros, you will see the names of the people who created the MBS market. Fink is not even mentioned.
The MBS market grew out of the collapse of the Savings and Loan banks (S&Ls), which were doomed when the Fed stopped keeping interest rates artificially low. S&Ls had lots of mortgages on their books at artificial Fed rates, and those mortgages were instantly underwater when rates returned to “free market” levels.
MBS pools were created to take those mortgages off the S&L balance sheets, re-capitalize them with new liquidity, and hopefully (wishfully?) they would miraculously grow their way out of insolvency. That was the plan anyway. It didn’t work.
Fink and Blackrock make their money managing MBS pools according to simple heuristics, and holding the debt until maturity or until they prepay. A lot of Blackrock profits come from managing the NY Fed’s Maiden Lane off-balance sheet “corporation” which is full of underwater mortgages from 2006-2008. The Fed provides unlimited lending at subsidized rates.
Deja Vu… the new batch of underwater mortgages from the Fed’s artificially low interest rates (2010-2022) are now causing the same bank solvency issues as they did the last time. Lather, rinse and repeat.
But this time the banks are getting bailed out preemptively by the taxpayer (unbeknownst to him/her). The magical stealth bailouts…no pitchforks, no political consequences (but the pain still gets felt by inflation and the hollowing out of the middle class).
The Fed caused the problem by artificially lowering rates, and keeping them way too low for more than a decade after the “crisis” was over. The Fed caused the problem, at least in part, to facilitate out of control federal government spending. Why shouldn’t the entities that caused and benefited from the corruption have to pay?
If the banks were working with market interest rates, and they went bankrupt under market rates, you would have a good point. They should go bankrupt in that situation, only depositors should be bailed out (up to the pre-existing FDIC limit).
Inflation is caused by the Fed “printing” too much liquidity, and/or by fiscal spending gone berzerk. The average voter doesn’t pay attention to these shennanigans until it blows up in everyone’s face after a few years.
If you don’t like it, you have to prevent the underlying disease (too much government spending). Everyone liked it when Janet Yellen (as Fed chair) was handing out money to every Congressional spending idea they could imagine; but then comes the hangover. don’t get sloppy drunk on spending, and then complain about the hangover.
It wasn’t just the leverage, it was also rampant fraud. Fake numbers and BS all over. Even faked docs used to fraudulently foreclose on innocent homeowners.
Subprime “borrowers” committed fraud on their applications, overstated their income and their collateral value. Bad banks lost paperwork (which was a lot of crap in the first place) and their rescue banks then fraudulently stated they had grounds to foreclose — and they might or might not have basis to foreclose, but the paperwork was crap from the get go, so no one knows for sure.
FNMA was chartered as a mortgage insurer, but under Clinton appointee Franklin Raines, FNMA started competing against banks offering politically motivated mortgages at cut rate prices. FNMA claimed to have full US treasury backing, enabling it to borrow cheaper than the banks, and thus lend cheaper too. That was a giant fraud, done for political reasons.
Doubya Bush’s first Treasury Secretary John Snow pointed out the FNMA fraud, in rather bold terms. So the criminals in Washington DC (both parties) ran him out of their town.
Too many people are very quick to claim “fraud”, and by that they mean the government bureaucrats commit fraud and want to blame anyone and everyone else.
Your government is made up of criminals, and you keep voting to give the criminals more and more power. You deserve the government you vote for, not the fantasy lifestyle your high school teacher sold you on.
It would makes sense to assume existing homes for sale are lower because homeowners are doing the math, ie their are locked in at a low mortgage rate and a new house will cost a lot more as well as higher mortgage rates and taxes. I am guessing that the homes that do come on the market are due to death, job transfer or possibly financial difficulities.
Of course that is all correct, but a large chunk of the US economy now DEPENDS on the the swift transfer of real estate from one set of hands to another, and maybe even back again! With the amount of transactions now being so impossibly low, I don’t get how the economy isn’t unraveling due to so few commission checks flying around.
STILL has nothing to do with mortgage interest rates or “not enough supply” which is just juvenile level understanding.
It is home buyers sitting on the sidelines after watching a traditional 4% annual price growth market skyrocket 100% to 400% over 3 years time. EVERYBODY knows it’s bullshit and an absolute bubble. Nobody wants to enter at massively inflated prices coupled with fewer people actually capable of being approved at these asinine price levels.
Crash home/residential RE prices a minimum of 50% and you will see buyers come back regardless of interest rates
It would help to have solvent banks (they went insolvent in 2008, and they still are) who can lend at market rates…. even the money center banks are dependent on cheap government funds to stay solvent.
FNMA and FHLMC are 90+% of the mortgage market, because no sane private institution would or is able to lend at artificially low, politically induced interest rates.
Beyond the insolvent bank issue, generation Z has been trained in whining, social justice screaming, and ordering mochachino cappachino lattes from Starbucks. Turns out the labor market for persons with those skills is close to zero. So a whole generation of “college grads” is instead doing high school summer jobs, all year round.
Yeah Fool, You DO realize that 2/3 of Generation Z isn’t OLD enough to be out of College….RIGHT?? 12 to 27, with the average age being 19 for generation Z….More than 2/3, they’re STILL in College. Sounds like you can stop yelling at them to “Get Off Your Lawn” because half of them are young enough to be mowing grass.
Don’t be ridiculous. They are not mowing grass. They get allowances plus $300 sneakers on their parents credit card.
Most of them have no idea how to start a lawn mower… I have tried to hire every kid in my neighborhood. They don’t work, and they don’t know how.
Start?
Reel Mowers – Shop By Tool – American Lawn Mower Co. EST 1895
In 2009 the accounting fraud was that big banks were allowed by an act of Congress to not mark-to-market.
Yeah nonsense like this is why people don’t understand the Real Estate Market.
1. There’s WAY more people in the country, by MILLIONS over the preceding Decade. 2. Home builders are NOT building enough replacement homes…especially at the prices that would move them quickly. 3. People who are living multiple generations to a home will Eventually save up enough for a Down Payment / and get the heck out of the family’s home to get their OWN place. 4. LOTS of Boomers dropping dead every day…now it takes months, at least, (sometimes years) for those houses / estates / properties to get Decided upon by the Family who inherits it…or Sold or Allocated to their kids. There’s almost NO chance that RE prices for SFHs go DOWN 50% in almost any area, that isn’t purely speculative. Simply put, the Fed will eventually drop rates…and houses will eventually begin to move quicker…this year…next year…or the year after. Meanwhile, there will be MORE people entering the US LEGALLY…and will have great jobs because they have skills and probably some savings. They will eventually buy new houses / condos / townhomes.
Yea the gurus said this is the early 90s and again in the mid 2000s…..
So what are they gonna buy it with? Their 4th job?
Go away kid
He’s clueless. Doesn’t understand just how much of the US is friendly to construction. There’s already tons of evidence that we not only do not h have a real shortage, but that we might have a GLUT of structures in the upcoming years, especially once Trump seals up the border tight.
Often hearing the “I bought, now the market can crash, you’re welcome” joke when people buy.
Everything is a casino now.
In these data, does a tiny home count and if so, how much is their influence on the numbers?
The back seat of your SUV does not count as a “tiny home”. It counts as homeless.
A tent on a city sidewalk also does not count. Even if you took over the tent when the previous tenant died, that is not considered “existing home sales”.
Big cities like NYC, Chicago, and San Fransisco have already maxed out the sales / rental of closets masquarading as appartments. A lot of Google employees are living in RVs parked outside the office (that is, unfortunately true, not a joke).
Nah dude you’re clueless. Move along.
Plenty of Apartments in most of those cities. If you could add value…it would be to be quiet and let the knowledgeable people talk.
There’s NOT a lot of Tiny Homes in the US. Zoning and permits, etc. make it more challenging. They’ll get more eventually but not even a rounding error on the total housing numbers. Might change in the long run…but probably would take decades to even register as a blip on the overall numbers.
I recently read an interesting analyst who wrote about longer-term home sales based on male marriage data. It seems males are losing interest in marriage; therefore, they are not interested in becoming a family man, which translates into lower home sales.
It could be a powerful butterfly effect in the making.
Nah, because “Existing Home Sales” includes Condos and Townhomes…so irrelevant whether they are married or not…if they make enough money, they will buy a condo or TH or Co-Op.
Marriage is really about kids, and nobody can afford a house to put them in, or a private school where the kids don’t all sit there on their phone all day.
Then there’s this fairly immediate environmental s**tstorm brewing and fresh world war on slow burn you’d be bequeathing them.
I think it’s going to take reversion to Stone Age living to get people breeding like they did in the 20th century again.
Not enough supply and too much demand. Home builders can’t build homes fast enough in some places in the country.
Builders know that “demand” from college social justice warriors is not actually demand. They need paying customers, not whiny marxists complaining that their allowance isn’t big enough.
It also turns out that Marxists are piss poor at building houses too. They take constant breaks and spend most of the day whining about bourgeoisie capitalist pigs instead of doing construction.
Builders only build when they believe they can sell the resulting house at a profit. They are not charities.
Let me clue you on to the Gen Z.
They have a plan.
It’s called the pillow plan.
They’re going to get jobs in nursing homes and smother the Boomers.
Boomers are filthy greedy self entitled hypocritical war mongering Zionist fascists.
They destroyed the country.
Ruined the world that’s on the brink of nuclear war.
Every time I see one of these cretins nearing death I cheer.
Perhaps true in spirit — hopefully your anger is venting / making a joke?
But after you vanquish the world of selfish boomers, you will need real world skills to rebuild on the ruins they left behind.
I don’t see many Gen Z’ers capable of rebuilding. Destroying a failed system is easy (the system is doing a lot of the destroying for you). Rebuilding afterward is hard work, and socialists / Marxists aren’t known for doing anything besides “cashing” their allowance checks.
If you’re smotherable by a pillow wielding soy boy marxist, you ain’t doing anybody any good, anymore, anyway.
If they smother ya, they don’t have to keep up the various machinery that keeps you alive, and can focus on the stuff you used to take care of.
I think they’ll be ok.
While he probably deserved that based on his posts…possibly a wee bit extreme?? They don’t need to smother them…most of that generation aren’t in good health ANYWAY…so they’re dropping like flies on a daily basis. About 3,000 Boomers hitting the Dusty Trail every day, is the last figure I heard??
Gen Z isn’t going to do shit except continue to bitch and moan just like many of the other internet warriors from across the generations that post here. Everybody is a victim now. It’s truely pathetic.
No Boomers pulled the triggers on 11/22/1963.
I’m getting my GenX tattoo RIGHT now. Those little bastards forget about us.
Wow Willie, you’ve gotten stupid with age. Whatever happened to “The Sunny Side of the Street?” Time for you to mosey on cowpoke.
We ALL know that Houses and almost ALL construction is built by recent immigrants, High School Grad or Dropouts and / or people out of work from an industry that was going out of business (Coal Miners anyone??) Builders build EXPENSIVE HOMES…just like Legacy Auto Makers build EXPENSIVE Trucks and SUVs because they are higher margin. It will be the Death of Ford and GM…because they’ve gone away from affordable vehicles…but that’s OK..I’m sure you’ll be there to prop them up!