Buyers came back into the existing-home market in February. But median price rose for the 8th consecutive month, making things very difficult for new buyers. The share of first-time buyers fell again.
Largest Monthly Increase in a Year
The NAR reports Existing-Home Sales Vaulted 9.5% in February, Largest Monthly Increase in a Year
Key Highlights
- Existing-home sales surged 9.5% in February to a seasonally adjusted annual rate of 4.38 million, the largest monthly increase since February 2023.
- Sales declined 3.3% from the previous year.
- The median existing-home sales price elevated 5.7% from February 2023 to $384,500 – the eighth consecutive month of year-over-year price gains.
- The inventory of unsold existing homes increased 5.9% from one month ago to 1.07 million at the end of February, or the equivalent of 2.9 months’ supply at the current monthly sales pace.
- First-time buyers were responsible for 26% of sales in February, down from 28% in January and 27% in February 2023.
- Properties typically remained on the market for 38 days in February, up from 36 days in January and 34 days in February 2023.
- All-cash sales accounted for 33% of transactions in February, up from 32% in January and 28% one year ago.
Existing-Home Sales Percent Change from Month Ago
February was only the 6th monthly increase in 25 months.
The seasonal impact is interesting. Sales rose in January and February for 2023 and 2024 with big jumps in February of both years.
January and February account for 4 of the 6 positive months out of the last 25 months. Looking back another month, January of 2022 was also positive.
Are people retiring in January and moving in February?
Existing-Home Sales Supply
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 20 consecutive months.
Existing-Home Sales Since 1968
To put the rise in perspective, existing-home sales are now back yo to a level first reached in 1998.
One of the key stats in the report is first-time buyers were responsible for only 26 percent of sales.
Of that 26 percent, I wonder how many struck it big in the stock market, bitcoin, or technology job.
This is not a market very friendly to new buyers.
US Drops to Number #23 in the World Happiness Report
For the first time in the history of the report, the US dropped out of the top twenty happiest nations. The youth poll (30 and under) is a disaster for the US, Germany, Canada, France, Japan, and China.
Yesterday, I noted US Drops to Number #23 in the World Happiness Report
The US fell to #23 but averages do not tell the story.
Of those 60 and older the US was #8. Of those 30 and younger, the US was #62.
In the US, those age 30 and younger believe they will be worse off than their parents. I think they are correct in that assessment.
The economy is allegedly booming, but only the asset holders have benefitted.
Gen Z, the Most Pessimistic Generation in History
Young adults are more skeptical of government and pessimistic about the future than any living generation before them. This is with reason, and it’s likely to decide the election.
Economic Reality
Gen Z may be the first generation in US history that is not better off than their parents.
Many have given up on the idea they will ever be able to afford a home.
The economy is allegedly booming (I disagree). Regardless, stress over debt is high with younger millennials and zoomers.
This has been a constant theme of mine for many months.
Auto Loan Delinquencies
Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.
For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39
Generational Homeownership Rates
The above chart is from the Apartment List’s 2023 Millennial Homeownership Report
Those struggling with rent are more likely to be Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.
The same age groups struggling with credit card and auto delinquencies.
Many have concluded they will never be able to afford a house or have kids. Those who have concluded that are likely correct.
For more discussion, please see Gen Z, the Most Pessimistic Generation in History, May Decide the Election
And today we see another new low in first time buyers.
It all ties together.
According to real estate data provider ATTOM, home foreclosures nationwide rose again in February, in some states greater than 50%
The best time to buy a suburban house was yesterday. The next best time to buy a home is tomorrow. Inflation is wonderful.
Existing home sales : lower lows, lower highs.
Proxy buying.
Bankrolled speculators.
Actually the feudal feifdoms, banksters, the lackies of the almighty fed with limitless fresh cash hot off the presses.
Intent is to own every stick of real estate in the country and lord it over a nation of hapless renters.
The grabbing is good for them with the inflationary depression devouring the equity and incomes of the commoners who thought they could work their way to independence.
It’s no happenstance. Bernanke conducted the most contractionary money policy since the GD. Powell conducted the most expansionary money policy ever.
Rise in present generational pessimism is a classic signature of imminent need for paradigm change. Just sayin’.
Go ‘long’ on pitchforks & torches?
So interest rates really AREN’T too high!
And given that inflation seems to be increasing, rather than declining back to the FED’s targeted 2% level, a case can be made that interest rates should be increased, not the reverse, in coming months.
Election year. Biden admin, likely putting pressure on Fed. to lower rates. I’m not expert, but then most experts aren’t either. But I think you’re right, especially with the hot inflation reports of late.
Fed is already under extreme pressure from the Biden admin to not raise rates higher to where they belong. Think rates are too high now? You ain’t seen nothing yet. Just wait until after the election.
Won’t happen before the election. If Trump is elected expect an immediate 5% increase the day after the inauguration.
Is this a melt up?
minus 10% mortgage rates would give one hell of a fckn boost to home sales ! Would it not ? Lez do it then ! Problems that might occur will of course be solved by printing…wha’ else is a printin’ press for, bu’ fo’ printin ….an’ wi’ another war won the US can definitely affor’ it …
Our future is similar to Europe where all the generations live together to survive. And people are surprised by the happiness factors going through the floor?
I don’t think most people are at all surprised.
That was the model when I was a kid back in the 40’s. We had four generations in the same house and none of them were happy. You do what you need to do, its not always ideal.
So existing homes sales shot up 9.5% from January
But when measured like every SEC company measures sales(same period TY vs LY) they are down 3.3%vs February of last year.
So existing sales actually fell vs last year. How does the NAR come up with an increasing run rate when M//M sales were down. Can someone explain the math.
Yes, It’s a self-interested attempt to put lipstick on the pig.
Mish,
How are they projecting an up year from a down month? What is their formula?
Apparently high interest rates and high prices are no longer an impediment to home sales. All cash buyers are a bit higher so I have to conclude that enough people are making enough money to pay for the mortgage. Perhaps we have underestimated the prosperity of the economy.
Do we know if those all cash buyers are:
1) Families/individuals actually planning to live there
2) hedge funds / corporations looking to buy in order to rent the property (ie landlords)
3) Flippers (those local developers you see signs for all over the place that say they pay cash for homes which they then remodel and sell at a profit)
If all cash buyers includes all 3 of these types of buyers then its likely that 2 and 3 are the dominant numbers in that category.
The only really all cash buyer in category 1 is the aging boomer who is downsizing and sold their home and had enough to pay cash to downsize to a smaller one and banked / invested the rest.
Boomers are dying and the kids sell the house and use that money to help buy another. That probably is the reason for the bump up in all-cash offers. Big companies and hedge funds don’t have free cash anymore to the extent they had before. With commercial real estate tanking I doubt many funds are saying to their shareholders that residential real estate is a great buy now. That would be a very hard sell. Costs for flippers are higher now also and AirBnB owners are hurting a lot so there goes groups 2 and 3 leaving group 1. I think most people have figured out that the Fed will not lower rates soon and that prices are not coming down either so they buy and have the resources to do so.
You have squatters don’t take over while you’re trying to sell the asset.. the stories coming out lately are truly frightening recent immigrants are giving pointers on how to take over vacant properties
I wonder what the percentage of cash deals has been over the long term.
Cash transactions are not exceptionally high by historical standards but in the zero-interest rate climate after 2008 borrowing made economic sense because it was costless. Now with interest rates high it makes economic sense to use cash and save the cost of interest.
I am literally swimming in cash. March is when most companies pay their annual bonuses, I am up almost 150k in liquid cash accounts and don’t now what to do with it. I have T-bills coming out the wazoo. On Tuesdays I need to log on and buy more 4 week t-bills because that’s when the auction happens. EVERY TUESDAY.
I set money aside for rentals but I’m not paying these ridiculous prices, the cap rate is like 2% so I may as well earn 5.3% on t-bills with no fuss and no muss.
I am sure there are millions of people like me buying these houses swimming in cash because the S&P is overvalued too. Nowhere to hide or run. There is still too much cash in the system.
Too much money and you don’t know what to do with it? I have the solution. Me and some friends have set up a brand-new cryptocurrency based in the Pacific tropical paradise of Nauru. Ralf Goldman and Whitherspoon Sachs have estimated that its value will surpass that of Bitcoin. Send you your bank details and as much money as you don’t need for basic living to me.
Why go to Nauru? I am about to release OneCoin which will surpass all other coins – except perhaps Krugman’s.
It is impossible for OneCoin to inflate as there is only one coin which I keep locked up in my basement. I am accepting offers for 1/10,000,000 shares of my one coin. No electricity involved, transactions are recorded in a bound ledger with permanent iron gall ink. Limited to 1000 shares per family. Hurry, hurry. Don’t be left out.
Housing is a luxury good that greatly improves quality of life and a much better investment than almost all equities. Housing outside of major cities in livable communities is going to continue increasing in price, until every desirable area is priced like the Bay Area. There simply isn’t enough single family home construction or space to build in these desirable areas.
Housing isn’t a luxury item. Instead, it is considered an “investment” in the USA and the expectation of most people is that their:investment” will increase in value year over year.
It’s a luxury compared to renting a cramped multifamily unit where your rent goes up 10% each other.
Um, that cramped multifamily unit is housing too.
Umm, and somebodies “investment” also.
Could sales of existing homes be driven by old folks fleeing dystopian cities?
In such case price almost doesn’t matter.
🤣😂🤣😂🤣😂🤣😂 the FED criminals are achieving their only mandate. Time for the masses to awaken and do what comes next
…to awaken and do the right thing. FIFY.
Whats the “right thing”?
Reply would belong to another thread.