For Wednesday, Nov 23
To keep the holiday dinner conversations peaceful, instead of talking politics and religion, talk about REAL ESTATE! Here are your talking points. (Although it could easily lead back to the aforementioned subjects so beware.)
October Existing Home Sales Plunge
Much higher mortgage rates have ensured that this will be the coldest 4Q in quite some time — at least as far as existing home sales go.
According to the NAR, October existing home sales fell 5.9% month-on-month (compared to September 2022) and plunged 28.4% year-on-year (compared to October 2021). This is the 9th-consecutive monthly drop. This is much more than just a seasonal slowdown.
Note: The 4.43 million figure you see in the chart below is a seasonally-adjusted, annualized figure. 4.43 million homes were not sold in October. Instead, it’s telling you that if the pace of sales seen in October (adjusted for seasonality) continued for the next 12 months, you’d sell 4.33 million homes. This figure is just 10% above the May 2020 low of 4.07 million.
In addition, there continues to be a big difference from region to region. Things were much worse in the West, where existing home sales were down 38% YoY and there was a dramatic contraction (41%-45%) in the sale of higher-end homes. On the other hand, the Northeast is performing the best (smallest contraction of 23% YoY). Also note that the big decline in homes priced between $100–250K across the US is at least partially due to fewer homes listed within that price range thanks to rapid home price increases.
October 2022 Existing Single Family Homes Sold
By Region and Sales Price
After the big decline two weeks ago, average 30-year mortgage rates have hovered around the 6.6% level. This means that monthly mortgage payments are $100–200/month lower than they would have been in mid-November when rates were at 7.25% (with no points purchased).