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Economy in Brief

U.S. Existing Home Sales Fell Further in September
by Sandy Batten  October 20, 2022

• Eighth consecutive monthly decline to lowest level since COVID lockdown.

• Declines were broad-based regionally with annual declines across all regions.

• Decades-high interest rates taking their toll.

With mortgage interest rates having risen to their highest level since 2001, sales of existing homes continued to decline in September, falling 1.5% m/m (-23.8% y/y) to 4.71 million units at a seasonally adjusted annual rate. Apart from the plunge in sales associated with the COVID lockdown in the spring of 2020, this was the lowest level of sales since the summer of 2012 and was the eighth consecutive monthly decline. Since February, when the current string of monthly declines began, sales have fallen 27.4%. The Action Economics Forecast Survey expected September sales of 4.68 million units.

Sales of single-family homes fell 0.9% m/m (-23.0% y/y) in September to 4.22 million units following a 1.4% m/m decline in August. Condo and co-op sales dropped 5.8% m/m (-30.0% y/y) in September, more than offsetting their 4.0% m/m increase in August. Apart from the lockdown plunge, sales of single-family homes were the lowest since 2015 while sales of condos & co-ops were the lowest since 2012.

Home sales declined in three of the four major regions and were unchanged in the fourth. Sales fell 1.6% m/m (-18.7% y/y) in the Northeast, decreased 1.7% m/m (-19.7% y/y) in the Midwest, and dropped 1.9% m/m (-23.8% y/y) in the South. Sales were unchanged in the West in September from August but were down 31.3% from a year ago.

The number of existing homes for sale (NSA) fell 2.3% m/m (-0.8% y/y) in September, the second consecutive monthly decline. The months' supply of homes on the market (NSA) was unchanged at 3.2 months at the current selling rate, the highest since June 2020 but still low by historical standards. It has increased from a series low of 1.6 months reached in January of this year. These figures date back to January 1999.

The median price of an existing home (NSA) fell for the third consecutive month, decreasing 1.8% m/m (+8.4% y/y) to $384,800. Prices declined in all four regions in September from August with prices in the Northeast posting the largest monthly fall.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's USECON database. Regional price and affordability data and national inventory data are available in the REALTOR database. The expectations figure is from the Action Economics Forecast Survey, reported in the AS1REPNA database.

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