Sales of new
single-family houses in October 2022 were at a seasonally adjusted annual rate
(SAAR) of 632,000 units (575,000 expected).
This is 7.5% (±20.8%)* above the revised September rate of 588,000 (originally
603,000 units), but 5.8% (±19.6%)* below the October 2021 SAAR of 671,000
units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in
the table above) was -5.9%. For longer-term perspectives, NSA sales were 54.5%
below the “housing bubble” peak and 8.2% below the long-term, pre-2000 average.
The
median sales price of new houses sold in October 2022 was a record-high $493,000
(+8.2%, or $37,300). The average sales price was $544,000 (+5.3% or $27,600). Homes
priced at/above $750,000 were 14.6% of sales, up from the year-earlier 11.8%.
* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.
As mentioned in our post about housing permits, starts and completions in October, single-unit completions fell by 87,000 units (-8.3%). Sales rose (44,000 units), resulting in inventory for sale expanding in absolute terms (+7,000 units) but shrinking in months-of-inventory terms (-0.5 months).
Existing home sales retreated for a ninth month in October (-5.9% or 280,000 units) to a SAAR of 4.43 million units (4.36 million expected). Inventory of existing homes for sale contracted in absolute terms (-10,000 units) but expanded on a months-of-inventory basis. Because resales retreated but new-home sales rose, the share of total sales comprised of new homes increased to 12.5%. The median price of previously owned homes sold in October slipped to $379,100 (-1.1% or $4,400).
Housing affordability nudged lower (-7.2 index points) although the median
price of existing homes for sale in September fell by $7,800
(-2.0% MoM; +8.1 YoY) to $391,000. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices declined at a not-seasonally adjusted monthly change
of -1.0% (+10.6% YoY).
“As
has been the case for the past several months, our September 2022 report
reflects short-term declines and medium-term deceleration in housing prices across
the U.S.,” said Craig Lazzara, Managing Director at S&P DJI. “For example,
the National Composite Index fell -1.0% in September, and now stands 10.6%
above its year-ago level. We see comparable patterns in our 10- and 20-City
Composites, which declined -1.4% and -1.5%, respectively, bringing their
year-over-year gains down to 9.7% and 10.4%. For all three composites,
year-over-year gains, while still well above their historical medians, peaked
roughly six months ago and have decelerated since then.
“Despite
considerable regional differences, all 20 cities in our September report
reflect these trends of short-term decline and medium-term deceleration. Prices
declined in every city in September, with a median change of -1.2%.
Year-over-year price gains in all 20 cities were lower in September than they
had been in August.
“The
three best-performing cities in August repeated their performance in September.
On a year-over-year basis, Miami (+24.6%) edged Tampa (+23.8%) for the top
spot, with Charlotte (+17.8%) beating Atlanta (+17.1%) for third place. The
Southeast (+20.8%) and South (+19.9%) were the strongest regions by far, with
gains more than double those of the Northeast, Midwest, and West; the two worst-performing
cities were San Francisco (+2.3%) and Seattle (+6.2%).
“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable. Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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