Housing Market Standstill
(2/5) From August to September, home-sale prices fell 0.5%.
Still, prices rose 8% year over year due to persistent tight supply and inflation.
— Redfin (@Redfin) October 19, 2022
That’s not a standstill. It’s a collapse. So is this.
60,000 Deals Called Off
(4/5) A record 22% of homes for sale had a price drop in September as homebuyer bidding wars eased. pic.twitter.com/gMaDerBUsd
— Redfin (@Redfin) October 19, 2022
About 60,000 deals were called off, equal to 17% of homes that went under contract—the highest share on record aside from March 2020.
(5/5) Zhao continued: “With inflation still rampant, the Federal Reserve will likely continue hiking interest rates. That means we may not see high mortgage rates—the primary killer of housing demand—decline until early to mid-2023.”
— Redfin (@Redfin) October 19, 2022
For the complete Redfin report, please see Home Sales, Listings Plunge Over 20% in September—Most on Record Aside From Pandemic Start
NAR Existing Home Sales Report
The National Association of Realtors existing home sales report comes out tomorrow.
The Bloomberg Econoday consensus is 4.695 million sales at at Seasonally Adjusted Annualized Rate (SAAR), down from 4.800 million in August.
That would be a decline of 2.2 percent vs the Redfin reported 2.7 percent.
Housing Starts Resume Crash in September as Widely Expected
As noted earlier today, Housing Starts Resume Crash in September as Widely Expected
Comments on the Fed
- The Fed actively created a housing bubble a second time, by holding interest rates too low, to long again.
- The Fed added mortgages to its balance sheet all the way to March of 2022 despite surging inflation.
Now, the Fed actively seeks to pop the housing bubble that it created. Given policy acts with a lag, the Fed is likely to overshoot with a policy error in the opposite direction.
Is this anyway to run a business?
Decline Every Month This Year
According to the NAR, Existing home sales have decline every month since January. September will not be an exception.
Weakness like this is seldom seen outside of recessions.
Inflation Out of Hand
In related news, please note Renters Surpass Homeowners in 41% of Zip Codes in the 50 Largest U.S. Cities
To understand how far behind the curve the Fed let inflation progress, please see CPI Much Hotter Than Expected Led by a Surge in Price of Food and Shelter
This post originated at MishTalk.Com.
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Mish
Kookery!
Yes. Problem with that is we’ve got too many fire sales in too many areas. This is the everything bubble. And everything is far more liquid than real estate. I see a massive crash(like everyone else because it’s already happening) but it’s going to take some years for that market to recover. If it does at all. All this fine leadership from all the experts has done a fine job of turning us into a declining empire. And when you’ve got land in a shithole it ain’t ever going to be worth much.
Freedom and population density are inversely proportional.