CALCULATERISK
Early Reporting Markets suggest some month-to-month increase in Sales in October, SAAR
By Bill McBride
This is the first look at several early reporting local markets in October. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Closed sales in October were mostly for contracts signed in August and September. Since 30-year fixed mortgage rates were in the 7.1% in August and 7.2% in September, compared to the high-5% range the previous year, closed sales were down year-over-year in October.
For review on mortgage rates, here is a table of the Freddie Mac Primary Mortgage Market Survey® data (includes points, so lower than the rate with no points).
Active Inventory in October
Here is a summary of active listings for these early reporting housing markets in October.
Inventory surged in some of these markets last year, but that has changed.
For example, inventory in Denver was up 116% YoY in October 2022, and is now up only 3% YoY. And inventory in Las Vegas was up 150% YoY in October 2022, and is now down 44% YoY. That is a HUGE change.
Inventory for these markets were down 12.5% YoY in September and are now down 11.1% YoY.
Notes for all tables:
New Listings in October
And here is a table for new listings in October (some areas don’t report new listings). For these areas, new listings were down 10.7% YoY. Potential sellers that are locked into their current homes with low mortgage rates has pushed down new listings.
Last month, new listings in these markets were down 18.2% YoY. The YoY decline in new listing has been getting smaller, mostly because new listings collapsed a year ago as mortgage rates increased.
Based on the recent trend, it is likely new listings will be up YoY soon, but still at historically low levels.
Closed Sales in October
And a table of October sales.
In October, sales in these markets were down 11.1%. In September, these same markets were down 21.6% YoY Not Seasonally Adjusted (NSA).
This is a much smaller YoY decline NSA than in September for these early reporting markets. However, this is where seasonal adjustments make a difference.
There was one more working day in October 2023 compared to October 2022, the opposite of September when there was one fewer working day in 2023 compared to 2022. So, for October, the seasonally adjusted decline will be larger than the NSA decline.
This graph shows existing home sales by month for 2022 and 2023, on a Seasonally Adjusted Annual Rate (SAAR) basis.
This early data suggests the October existing home sales report will show another significant YoY decline, perhaps to just above 4 million SAAR (early guess of Seasonally Adjusted Annual Rate), and above the cycle low of 3.96 million SAAR last month. This will be the 26th consecutive month with a YoY decline in sales.
Note that the low during the housing bust was 3.30 million in July 2010.
This was just several early reporting markets.