Existing home sales fall to recessionary levels;  prices have clearly fallen;  low inventory is still a problem

– by a New Deal Democrat

As I wrote earlier this morning, my main interest in existing home sales at this point is pricing. [Note: graphs below for sales and prices does not include October]

For the record, existing home sales fell to a new 2.5-year low (i.e., since the pandemic lockdown began) of 4.430 million on an annualized basis:

Before the pandemic, the last time the number was this low was in 2012. Also, this is down -19.5% year-over-year, -26.4% from their recent secondary peak in February, and -35.3% below their expansion peak in October 2020. This is the number I would expect on the brink of a recession.

More importantly, median prices declined seasonally by -1.5% for the month to $379,100. That’s “only” 6.6% higher than a year ago and the slowest year-over-year increase since over 2 years:

The highest year-over-year change over the past 12 months was +17.6% in January. This is the third month in a row that the rate of change has declined by more than 50%, my rule of thumb for when the seasonally adjusted data set will give up.

In short, I think we can safely say that existing home prices, if we were able to seasonally adjust, have come down since the summer peak.

Inventory is also not seasonally adjusted. This is down month-on-month, but year-on-year it is -0.8% lower:

We’re nowhere near solving the low inventory problem we’ve had since before the pandemic hit.

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