Sales of new
single-family houses in November 2022 were at a seasonally adjusted annual rate
(SAAR) of 640,000 units (600,000 expected).
This is 5.8% (±22.7%)* above the revised October rate of 605,000 (originally
632,000 units), but 15.3% (±13.0%) below the November 2021 estimate of 756,000
units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in
the table above) was -14.8%. For longer-term perspectives, NSA sales were 53.9%
below the “housing bubble” peak and 12.0% below the long-term, pre-2000 average.
The
median sales price of new houses sold in November 2022 was $471,200 (-2.8%, or
$13,500). The average sales price was $543,600 (+1.9% or $10,200). Homes priced
at/above $750,000 comprised 17.4% of sales, up from the year-earlier 11.1%.
* 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 November, single-unit completions rose by 91,000 units (+9.5%). Sales also rose (35,000 units), resulting in inventory for sale shrinking in both absolute (-8,000 units) and months-of-inventory terms (-0.7 month) terms.
Existing home sales retreated for a tenth month in November (-7.7% or 340,000 units) to a SAAR of 4.09 million units (4.2 million expected). Inventory of existing homes for sale contracted in absolute terms (-80,000 units) but was unchanged on a months-of-inventory basis. Because resales retreated while new-home sales rose, the share of total sales comprised of new homes increased to 13.5%. The median price of previously owned homes sold in November dropped to $370,900 (-2.1% or $8,100).
Housing affordability nudged lower (-5.8 index points) although the median
price of existing homes for sale in October fell by $4,700 (-1.2%
MoM; +6.2 YoY) to $384,900. 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 -0.5% (+9.2% YoY).
“October
2022 marked the fourth consecutive month of declining home prices in the United
States,” said Craig Lazzara, Managing Director at S&P DJI. “For example,
the National Composite Index fell -0.5% for the month, reflecting a -3.0%
decline since the market peaked in June 2022. We saw comparable patterns in our
10- and 20-City Composites, both of which stand -4.6% below their June peaks
after October declines of -0.7% and -0.8%, respectively. These declines, of
course, came after very strong price increases in late 2021 and the first half
of 2022. Despite its recent weakness, on a year-over-year basis the National
Composite gained 9.2%, which is in the top quintile of historical performance
levels.
“Despite
considerable regional differences, all 20 cities in our October report reflect
these trends of short-term decline and medium-term deceleration. Prices
declined in every city in October, with a median change of -0.9%.
Year-over-year price gains in all 20 cities were lower in October than they had
been in September; the median year-over-year increase across the 20 cities was
8.3%.
“October’s
best-performing cities were Miami (+21.0% year-over-year) and Tampa (+20.5%),
with Charlotte (+15.0%) edging Atlanta (+14.9%) for third place. The Southeast
(+17.9%) and South (+17.0%) were the strongest regions by far, with gains more
than double those of the Northeast, Midwest, and West. The two weakest
performers were San Francisco (up only +0.6% year-over-year) and Seattle
(+4.5%). San Francisco and Seattle peaked in May 2022, and both have declined
by more than -10% since then.
“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices. Given the continuing prospects for a challenging macroeconomic environment, 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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