March 2024 Residential Sales, Inventory and Prices

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Sales of new single-family houses in March 2024 were at a seasonally adjusted annual rate (SAAR) of 693,000 units (670,000 expected). This is 8.8% (±17.2%)* above the revised February rate of 637,000 (originally 662,000 units) and 8.3% (±19.5%)* above the March 2023 SAAR of 640,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +8.1%. For longer-term perspectives, NSA sales were 50.1% below the “housing bubble” peak but 28.2% above the pre-2000 average.

The median sales price of new houses sold in March was $430,700 (+6.0% MoM, or $24,200). The average sales price was $524,800 (+7.4%, or $36,200). Homes priced at/above $750,000 comprised 13.4% of sales, up from the year-earlier 11.3%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in March, single-unit completions fell by 111,000 units (-10.5%). Sales rose (56,000 units, or +8.8%), but inventory for sale expanded in absolute terms (+12,000 units) while shrinking in months-of-inventory terms (0.5 month). 

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Existing home sales sank (190,000 units or -4.3%) in March to a SAAR of 4.19 million units (4.18 million expected). The inventory of existing homes for sale expanded in both absolute (+50,000 units) and months-of-inventory (+0.3 month) terms. Because new sales advanced while resales retreated, the share of total sales comprised of new homes increased to 14.2%. The median price of previously owned homes sold in March jumped to $393,500 (+2.5% or $9.700).

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Housing affordability dropped by 2.7 percentage points as the median price of existing homes for sale in February climbed $5,800 (+1.5% MoM; +5.6% YoY) to $383,500. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices rose by a not-seasonally adjusted monthly change of +0.6% (+6.4% YoY).

“Following last year’s decline, U.S. home prices are at or near all-time highs,” said Brian Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “Our National Composite rose by 6.4% in February, the fastest annual rate since November 2022. Our 10- and 20-City Composite indices are currently at all-time highs. For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York. On a seasonally adjusted basis, our National, 10- and 20- City Composite indices continue to break through previous all-time highs set last year.”

“Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty. The first decline followed the start of the Federal Reserve’s hiking cycle. The second decline followed the peak in average mortgage rates last October. Enthusiasm for potential Fed cuts and lower mortgage rates appears to have supported buyer behavior, driving the 10- and 20- City Composites to new highs.”

“The Northeast region, which includes Boston, New York, and Washington, D.C., ranks as the best performing market for over the last half year. As remote work benefited smaller (and sunnier markets) in the first part of the decade, return to office may be contributing to outperformance in larger metropolitan markets in the Northeast,” according to Luke.

“San Diego has been the best performing market following the trough in home prices observed in early 2023. With Los Angeles rising for 13 consecutive months to record another new high, Southern California has outperformed its surrounding neighbors. San Francisco has dropped 12% since its peak, while Phoenix and Las Vegas have dropped 6% and 4.5%, respectively.”

“With all markets increasing on an annual basis, similar performance was observed in the monthly return data. Eighteen markets experienced uplift in February. Tampa experienced a decline of 0.3% while Seattle has the largest monthly gain of 2.3%.”

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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.

February 2024 Residential Sales, Inventory and Prices

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Sales of new single-family houses in February 2024 were at a seasonally adjusted annual rate (SAAR) of 662,000 units (675,000 expected). This is 0.3% (±16.2%)* below the revised January rate of 664,000 (originally 661,000 units), but 5.9% (±14.3%)* above the February 2023 SAAR of 625,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +7.1%. For longer-term perspectives, NSA sales were 52.3% below the “housing bubble” peak and 14.8% above the long-term, pre-2000 average.

The median sales price of new houses sold in February 2024 was $400,500 (-3.5% MoM, or $14,400). The average sales price was $485,000 (-7.3%, or $38,400). Homes priced at/above $750,000 comprised 11.7% of sales, little changed from the year-earlier 11.9%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in February, single-unit completions jumped by 180,000 units (+20.2%). Sales ticked lower (2,000 units, or -0.3%), so inventory for sale expanded in both absolute (+6,000 units) and months-of-inventory (8.3 months) terms. 

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Existing home sales surged (380,000 units or +9.5%) in February to a SAAR of 4.38 million units (3.92 million expected). The inventory of existing homes for sale expanded in absolute terms (+60,000 units) but shrank in months-of-inventory terms (-0.1 month). Because new sales retreated while resales advanced, the share of total sales comprised of new homes decreased to 13.1%. The median price of previously owned homes sold in February rose to $384,500 (+1.6% or $5,900).

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Housing affordability rose 3.3 percentage points as the median price of existing homes for sale in January retreated by $2,300 (-0.6% MoM; +5.0% YoY) to $383,500. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices slipped by a not-seasonally adjusted monthly change of -0.1% (but +6.0% YoY).

“U.S. home prices continued their drive higher,” said Brian Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “Our National Composite rose by 6% in January, the fastest annual rate since 2022. Stronger gains came from our 10- and 20-City Composite indices, rising 7.4% and 6.6%, respectively. For the second consecutive month, all cities reported increases in annual prices, with San Diego surging 11.2%. On a seasonally adjusted basis, home prices have continued to break through previous all-time highs set last year.”

“We’ve commented on how consistently each market performed during 2023 and that continues to be the case. While there is a large disparity between leaders such as San Diego versus laggards such as with Portland, the broad market performance is tightly bunched up. This is also true of high and low tiers. The average annual gains between high and low tiers across cities tracked by the indices is just 1.1%. Low price tiered indices have outperformed high priced indices for 17 months. Homeowners most likely saw healthy gains in the last year, no matter what city you were in, or if it was in an expensive or inexpensive neighborhood. No matter which way you slice it, the index performance closely resembled the broad market.”

“On a monthly basis, home prices continue to struggle in the face of elevated borrowing costs. Seventeen markets dropped over the last month, while Minneapolis has posted a 2.4% decline over the prior three months. Only Southern California and Washington D.C. have stood up to the rising wave of interest rates and delivered positive returns to start the year. San Diego rose 1.8% in January, followed by DC with 0.5% and Los Angeles at 0.1%.”

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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.

January 2024 Residential Sales, Inventory and Prices

 

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Sales of new single-family houses in January 2024 were at a seasonally adjusted annual rate (SAAR) of 661,000 units (685,000 expected). This is 1.5% (±19.9%)* above the revised December rate of 651,000 (originally 664,000 units) and 1.8% (±19.4%)* above the January 2023 SAAR of 649,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +3.6%. For longer-term perspectives, NSA sales were 52.4% below the “housing bubble” peak and 9.0% above the long-term, pre-2000 average.

The median sales price of new houses sold in January 2024 was $420,700 (+1.8% MoM, or $7,600). The average sales price was $534,300 (+8.3%, or $40,900). Homes priced at/above $750,000 comprised 14.0% of sales, up from the year-earlier 12.7%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in January, single-unit completions fell by 167,000 units (-16.3%). Sales advanced (10,000 units, or +1.5%), but inventory for sale expanded in absolute terms (+4,000 units) but remained constant in months-of-inventory terms. 

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Existing home sales rose (120,000 units or +3.1%) in January to a SAAR of 4.00 million units (3.97 million expected). The inventory of existing homes for sale expanded in absolute terms (+20,000 units) but shrank in months-of-inventory terms (-0.1 month). Because new sales advanced at a slower pace than resales, the share of total sales comprised of new homes decreased to 14.2%. The median price of previously owned homes sold in January dipped to $379,100 (-0.6% or $2,300).

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Housing affordability jumped 7.7 percentage points as the median price of existing homes for sale in December retreated by $5,200 (-1.3% MoM; +4.0% YoY) to $387,000. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices fell to a not-seasonally adjusted monthly change of -0.4% (but +5.5% YoY).

“U.S. home prices faced significant headwinds in the fourth quarter of 2023,” said Brian Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “However, on a seasonally adjusted basis, the S&P Case-Shiller Home Price Indices continued its streak of seven consecutive record highs in 2023. Ten of 20 markets beat prior records, with San Diego registering an 8.9% gain and Las Vegas the fastest rising market in December, after accounting for seasonal impacts.”

“2023 U.S. housing gains haven’t followed such a synchronous pattern since the COVID housing boom. The term ‘a rising tide lifts all boats’ seems appropriate given broad-based performance in the U.S. housing sector. All 20 markets reported yearly gains for the first time this year, with four markets rising over 8%. Portland eked out a positive annual gain after 11 months of declines. Regionally, the Midwest and Northeast both experienced the greatest annual appreciation with 6.7%.”

“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years. With trend growth at the national level of 4.7%, a 5.5% return demonstrates solid, steady growth. While we are not experiencing the double-digit gains seen in the previous two years, above-trend growth should be well received considering the rising costs of financing home mortgages. We previously suggested that the surge in home prices during the COVID pandemic could have accelerated home ownership temporarily. The past two years reflect consistent growth slightly above trend, suggesting a more secular shift in home ownership post pandemic. In the short term, meanwhile, we should be able to measure the impact of higher mortgage rates on home prices. Increased financing costs appeared to precipitate home price declines in the fourth quarter, as 15 markets saw lower values compared to September.”

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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.

December 2023 Residential Sales, Inventory and Prices

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Sales of new single-family houses in December 2023 were at a seasonally adjusted annual rate (SAAR) of 664,000 units (650,000 expected). This is 8.0% (±24.2%)* above the revised November rate of 615,000 (originally 590,000 units) and 4.4% (±20.6%)* above the December 2022 SAAR of 636,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +6.4%. For longer-term perspectives, NSA sales were 52.2% below the “housing bubble” peak and 4.4% below the long-term, pre-2000 average.

An estimated 668,000 new homes were sold in 2023. This is 4.2% (±5.2%)* above the 2022 figure of 641,000.

The median sales price of new houses sold in December 2023 was $413,200 (-3.0% MoM, or $12,800). The average sales price was $487,300 (+0.4%, or $1,800). Homes priced at/above $750,000 comprised 8.0% of sales, down from the year-earlier 17.0%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in December, single-unit completions rose by 82,000 units (+8.4%). Sales advanced by a smaller amount (49,000 units, or +8.0%), resulting in inventory for sale expanding in absolute terms (+4,000 units) but shrinking in months-of-inventory terms (-0.6 month). 

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Existing home sales retreated (40,000 units or -1.0%) in December to a SAAR of 3.78 million units (3.80 million expected). The inventory of existing homes for sale contracted in both absolute (-130,000 units) and months-of-inventory (-0.3 month) terms. Because new sales advanced while resales fell, the share of total sales comprised of new homes increased to 14.9%. The median price of previously owned homes sold in December dipped to $382,600 (-1.3% or $5,100).

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Housing affordability rose 2.8 percentage points as the median price of existing homes for sale in November retreated by $3,900 (-1.0% MoM; +3.5% YoY) to $392,100. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices fell to a not-seasonally adjusted monthly change of -0.2% (but +5.1% YoY).

“U.S. home prices edged downward from their all-time high in November,” says Brian Luke, Head of Commodities, Real & Digital Assets at S&P DJI. “The streak of nine monthly gains ended in November, setting the index back to levels last seen over the summer months. Seattle and San Francisco reported the largest monthly declines, falling 1.4% and 1.3%, respectively.”

“November’s year-over-year gain saw the largest growth in U.S. home prices in 2023, with our National Composite rising 5.1% and the 10-city index rising 6.2%. Detroit held its position as the best performing market for the third month in a row, accelerating to an 8.2% gain. San Diego notched an 8% annual gain, retaining its second spot in the nation. Barring a late surge from another market, those cities will vie for the ‘housing market of the year’ as the best performing city in our composite.”   

“Six cities registered a new all-time high in November (Miami, Tampa, Atlanta, Charlotte, New York, and Cleveland). Portland remains the lone market in annual decline. The Northeast and Midwest recorded the largest gains with returns of 6.4% and 6.3%, respectively. Other regions are not far behind with the slowest gains in the West of 3%. This month’s report revealed the narrowest spread of performance across the nation since the first quarter of 2021.”

“The tight disparity speaks to a rising tide across the country, with less evidence of micro-markets bucking the trend. The days of markets in the South rising double digits with markets in the Midwest remaining flat are over. The house price decline came at a time where mortgage rates peaked, with the average Freddie Mac 30-year fixed rate mortgage nearing 8%, according to Federal Reserve data. The rate has since fallen over 1%, which could support further annual gains in home prices.”

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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.

November 2023 Residential Sales, Inventory and Prices

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Sales of new single-family houses in November 2023 were at a seasonally adjusted annual rate (SAAR) of 590,000 units (690,000 expected). This is 12.2% (±15.6%)* below the revised October rate of 672,000 (originally 679,000 units), but 1.4% (±19.8%)* above the November 2022 SAAR of 582,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was 0.0%. For longer-term perspectives, NSA sales were 57.5% below the “housing bubble” peak and 21.6% below the long-term, pre-2000 average.

The median sales price of new houses sold in November was $434,700 (+4.8% MoM, or $19,800). The average sales price was $488,900 (-1.9%, or $9,600). Homes priced at/above $750,000 comprised 7.3% of sales, down from the year-earlier 14.6%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in November, single-unit completions slid by 32,000 units (-3.2%). Sales fell by a greater amount (82,000 units, or -12.2%), resulting in inventory for sale expanding in both absolute (+11,000 units) and months-of-inventory terms (+1.3 months). 

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Existing home sales advanced (30,000 units or +0.8%) in November to a SAAR of 3.82 million units (3.775 million expected). The inventory of existing homes for sale contracted in both absolute (-20,000 units) and months-of-inventory (-0.1 month) terms. Because new sales retreated while resales rose, the share of total sales comprised of new homes decreased to 13.4%. The median price of previously owned homes sold in November dipped to $387,600 (-1.0% or $4,000).

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Housing affordability fell 3.1 percentage points as the median price of existing homes for sale in October retreated by $1,300 (-0.3% MoM; +3.0% YoY) to $396,100. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices decelerated to a not-seasonally adjusted monthly change of +0.2% (but +4.9% YoY).

"U.S. home prices accelerated at their fastest annual rate of the year in October,” said Brian Luke, Head of Commodities, Real & Digital assets at S&P DJI. “Our National Composite rose by 0.2% in October, marking nine consecutive monthly gains and the strongest national growth rate since 2022.

“Detroit kept pace as the fastest growing market for the second month in a row, registering an 8.1% annual gain. San Diego maintained the second spot with 7.2% annual gains, following by New York with a 7.1% gain. We are experiencing broad-based home price appreciation across the country, with steady gains seen in 19 of 20 cities. This month’s report reflects trendline growth compared to historical returns and little disparity among cities and regions.

“Each of our 10-city, 20-city and National Index, remain at all-time highs, with 8 of 20 cities registering all-time highs (Miami, Atlanta, Chicago, Boston, Detroit, Charlotte, New York and Cleveland). While Portland remains slightly down compared to last year’s gains, Phoenix and Las Vegas have flipped to year-over-year gains. The Midwest and the Northeast region are fastest growing markets, while the Southwest and West regions have lagged other regions for over a year. A solid, if unspectacular report, this month’s index reflects a rising tide across nearly all markets.

“Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher. With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.”

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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.

October 2023 Residential Sales, Inventory and Prices

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Sales of new single-family houses in October 2023 were at a seasonally adjusted annual rate (SAAR) of 679,000 units (725,000 expected). This is 5.6% (±12.3%)* below the revised September rate of 719,000 (originally 759,000 units), but 17.7% (±17.9%)* above the October 2022 SAAR of 577,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +18.6%. For longer-term perspectives, NSA sales were 51.1% below the “housing bubble” peak and 2.5% below the long-term, pre-2000 average.

The median sales price of new houses sold in October was $409,300 (-3.1% MoM, or $13,000). The average sales price was $487,000 (-5.5%, or $28,400). Homes priced at/above $750,000 comprised 9.8% of sales, down from the year-earlier 14.0%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in October, single-unit completions slipped by 9,000 units (-0.9%). Sales fell by a greater amount (40,000 units, or -5.6%), resulting in inventory for sale expanding in both absolute (+6,000 units) and months-of-inventory terms (+0.6 month). 

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Existing home sales retreated (160,000 units or -4.1) in October to a SAAR of 3.79 million units (3.91 million expected). The inventory of existing homes for sale expanded in both absolute (+20,000 units) and months-of-inventory (+0.2 month) terms. Because new sales retreated more dramatically (on a proportional basis) than resales, the share of total sales comprised of new homes decreased to 15.2%. The median price of previously owned homes sold in October dipped to $391,800 (-0.3% or $1,000).

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Housing affordability rose 1.7 percentage points as the median price of existing homes for sale in September retreated by $11,000 (-2.7% MoM; +2.5% YoY) to $399,200. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices decelerated to a not-seasonally adjusted monthly change of +0.3% (but +3.9% YoY).

“U.S. home prices continued their rally in September 2023,” said Craig Lazzara, Managing Director at S&P DJI. “Our National Composite rose by 0.3% in September, marking eight consecutive monthly gains since prices bottomed in January 2023. The Composite now stands 3.9% above its year-ago level and 6.6% above its January level. Our 10- and 20-City Composites both rose in September, and likewise currently exceed their year-ago and January levels.

“We’ve commented before on the breadth of the housing market’s strength, which continued to be impressive. On a seasonally adjusted basis, all 20 cities showed price increases in September; before seasonal adjustments, 15 rose. Prices in 17 of the cities are higher than they were in September 2022. Notably, the National Composite, the 10-City Composite, and 10 individual cities (Atlanta, Boston, Charlotte, Chicago, Cleveland, Detroit, Miami, New York, Tampa, and Washington) stand at their all-time highs.

“On a year-over-year basis, the three best-performing metropolitan areas in September were Detroit (+6.7%), San Diego (+6.5%), and New York (+6.3%). San Diego’s presence breaks the Rust Belt’s recent grip on the top three positions, but the bottom three continue to have a western flavor. Year-over-year, September’s worst performers were Las Vegas (-1.9%), Phoenix (-1.2%), and Portland (-0.7%). The Northeast (+5.3%) and Midwest (+5.0%) continue as the nation’s strongest regions, while the West (-1.3%) remains the weakest.

“On a year-to-date basis, the National Composite has risen 6.1%, which is well above the median full calendar year increase in more than 35 years of data. Although this year’s increase in mortgage rates has surely suppressed the quantity of homes sold, the relative shortage of inventory for sale has been a solid support for prices. Unless higher rates or exogenous events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

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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.

September 2023 Residential Sales, Inventory and Prices

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Sales of new single-family houses in September 2023 were at a seasonally adjusted annual rate (SAAR) of 759,000 units (685,000 expected). This is 12.3% (±16.6%)* above the revised August rate of 676,000 (originally 675,000 units) and 33.9% (±22.9%) above the September 2022 SAAR of 567,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +36.4%. For longer-term perspectives, NSA sales were 45.4% below the “housing bubble” peak but 14.8% above the long-term, pre-2000 average.

The median sales price of new houses sold in September 2023 was $418,800 (-3.3% MoM, or $14,300). The average sales price was $503,900 (-3.6%, or $18,800). Homes priced at/above $750,000 comprised 11.7% of sales, down from the year-earlier 13.6%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in September, single-unit completions advanced by 50,000 units (+5.3%). Sales also rose (83,000 units, or +12.3%), resulting in inventory for sale expanding in absolute terms (+3,000 units) but months of inventory contracting (-0.8 month). 

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Existing home sales dipped (-2.0% or 80,000 units) in September to a SAAR of 3.96 million units (3.90 million expected). The inventory of existing homes for sale expanded in both absolute (+30,000 units) and months-of-inventory (+0.1 month) terms. Because resales retreated while new-home sales advanced, the share of total sales comprised of new homes increased to 16.1%. The median price of previously owned homes sold in September fell to $394,300 (-2.4% or $9,800).

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Housing affordability fell -2.2 percentage points as the median price of existing homes for sale in August rose by $2,300 (+0.6% MoM; +3.7% YoY) to $413,500. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices decelerated to a not-seasonally adjusted monthly change of +0.4% (+2.6% YoY).

“U.S. home prices continued to rise in August 2023,” said Craig Lazzara, Managing Director at S&P DJI. “Our National Composite rose by 0.4% in August, which marks the seventh consecutive monthly gain since prices bottomed in January 2023. The Composite now stands 2.6% above its year-ago level and 6.4% above its January level. Our 10- and 20-City Composites each also rose in August, and likewise currently exceed their year-ago and January levels.

“One measure of the strength of the housing market is the relationship of current prices to their historical levels. On that dimension, it’s worth noting that the National Composite, the 10-City Composite, and seven individual cities (Atlanta, Boston, Charlotte, Chicago, Detroit, Miami, and New York) stand at their all-time highs. Observing the breadth of price changes provides insight into another dimension of market health. On a seasonally adjusted basis, prices increased in 19 of 20 cities in August (and Cleveland only missed by a whisker); before seasonal adjustments, prices rose in 13 cities.

“Regional differences are substantial. On a year-over-year basis, the three best-performing metropolitan areas in August were Chicago (+5.00%), New York (+4.98%), and Detroit (+4.8%).  Chicago has topped the leader board for four consecutive months, and New York moved up this month to the silver medal position. The bottom of the rankings still has a western focus, with the worst performances coming from Las Vegas (-4.9%) and Phoenix (-3.9%).  The Midwest (+3.9%) continues as the nation’s strongest region, followed by the Northeast (+3.8%).  The West (-0.9%) and Southwest (-0.8%) remain the weakest regions.

“On a year-to-date basis, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data. The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more. Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

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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.

August 2023 Residential Sales, Inventory and Prices

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Sales of new single-family houses in August 2023 were at a seasonally adjusted annual rate (SAAR) of 675,000 units (699,000 expected). This is 8.7% (±15.6%)* below the revised July rate of 739,000 (originally 714,000 units), but 5.8% (±21.1%)* above the August 2022 SAAR of 638,000 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 51.4% below the “housing bubble” peak but 3.3% above the long-term, pre-2000 average.

The median sales price of new houses sold in August 2023 was $430,300 (-1.4%, or $6,300). The average sales price was $514,000 (+1.2%, or $6,100). Homes priced at/above $750,000 comprised 14.8% of sales, down from the year-earlier 15.7%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in August, single-unit completions retreated by 68,000 units (-6.6%). Sales also fell (64,000 units, or -8.7%), resulting in inventory for sale expanding in both absolute (+5,000 units) and months-of-inventory (+0.8 month) terms. 

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Existing home sales slipped (-0.7% or 30,000 units) in August to a SAAR of 4.04 million units (4.10 million expected). The inventory of existing homes for sale contracted in absolute terms (-10,000 units) but was unchanged in months-of-inventory terms. Because resales retreated more slowly than new-home sales, the share of total sales comprised of new homes decreased to 14.3%. The median price of previously owned homes sold in August rose to $407,100 (+0.3% or $1,400).

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Housing affordability was unchanged as the median price of existing homes for sale in July fell by $3,400 (-0.8% MoM; +1.6% YoY) to $412,300. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices decelerated to a not-seasonally adjusted monthly change of +0.6% (+1.0% YoY).

“U.S. home prices continued to rally in July 2023,” said Craig Lazzara, Managing Director at S&P DJI. “Our National Composite rose by 0.6% in July, and now stands 1.0% above its year-ago level. Our 10- and 20-City Composites each also rose in July 2023, and likewise stand slightly above their July 2022 levels.

“We have previously noted that home prices peaked in June 2022 and fell through January of 2023, declining by 5.0% in those seven months. The increase in prices that began in January has now erased the earlier decline, so that July represents a new all-time high for the National Composite. Moreover, this recovery in home prices is broadly based. As was the case last month, 10 of the 20 cities in our sample have reached all-time high levels. In July, prices rose in all 20 cities after seasonal adjustment (and in 19 of them before adjustment).

“That said, regional differences continue to be striking. On a year-over-year basis, the Revenge of the Rust Belt continues. The three best-performing metropolitan areas in July were Chicago (+4.4%), Cleveland (+4.0%), and New York (+3.8%), repeating the ranking we saw in May and June. The bottom of the leader board reshuffled somewhat, with Las Vegas (-7.2%) and Phoenix (-6.6%) this month’s worst performers.

“All of the cities at all-time highs are in the Eastern or Central time zones, and with two exceptions (Dallas and Tampa), all of the cities not at all-time highs are in the Pacific or Mountain time zones. The Midwest (+3.2%) continues as the nation’s strongest region, followed by the Northeast (+2.3%). The West (-3.8%) and Southwest (-3.6%) remain the weakest regions.

“On a year-to-date basis, the National Composite has risen 5.3%, which is well above the median full calendar year increase in more than 35 years of data. Although the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

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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.

July 2023 Residential Sales, Inventory and Prices

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Sales of new single-family houses in July 2023 were at a seasonally adjusted annual rate (SAAR) of 714,000 units (705,000 expected). This is 4.4% (±12.8%)* above the revised June rate of 684,000 (originally 697,000 units) and is 31.5% (±16.3%) above the July 2022 SAAR of 543,000 units; the not-seasonally adjusted (NSA) year-over-year comparison (shown in the table above) was +34.10%. For longer-term perspectives, NSA sales were 48.6% below the “housing bubble” peak but 12.9% above the long-term, pre-2000 average.

The median sales price of new houses sold in July was $436,700 (+4.8%, or $20,000). The average sales price was $513,000 (+1.1%, or $5,700). Homes priced at/above $750,000 comprised 10.2% of sales, down from the year-earlier 13.6%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

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As mentioned in our post about housing permits, starts and completions in July, single-unit completions advanced by 13,000 units (+1.3%). Sales also rose (30,000 units, or +4.4%), resulting in inventory for sale expanding in absolute terms (+11,000 units) but shrinking in months-of-inventory (-0.2 month) terms. 

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Existing home sales fell (-2.2% or 90,000 units) in July to a SAAR of 4.07 million units (4.15 million expected). The inventory of existing homes for sale expanded in both absolute (+40,000 units) and months-of-inventory (+0.2 month) terms. Because resales retreated while new-home sales rose, the share of total sales comprised of new homes increased to 14.9%. The median price of previously owned homes sold in July fell to $406,700 (-0.8% or $3,300).

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Housing affordability slid (-5.9 index points) as the median price of existing homes for sale in June rose by $14,500 (+3.6% MoM; -1.2% YoY) to $416,000. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices decelerated to a not-seasonally adjusted monthly change of +0.9% (-0.02% YoY).

“U.S. home prices continued to increase in June 2023," says Craig J. Lazzara, Managing Director at S&P DJI. "Our National Composite rose by 0.9% in June, and it now stands only -0.02% below its all-time peak from exactly one year ago. Our 10- and 20-City Composites likewise each gained 0.9% in June 2023, and stand -0.5% and -1.2%, respectively, below their June 2022 peaks.

“As we've noted previously, the recovery in home prices is broadly based. Prices rose in all 20 cities in June, both before and after seasonal adjustment. Over the last 12 months, 10 cities show positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices.

“Regional differences continue to be striking. On a year-over-year basis, June's three best-performing cities were Chicago (+4.2%), Cleveland (+4.1%), and New York (+3.4%) – the same three that had topped our May leader board. At the other end of the scale, the worst performers continue to be in the Pacific and Mountain time zones, with San Francisco (-9.7%) and Seattle (-8.8%) at the bottom. The Midwest (+2.8%) continues as the nation's strongest region, followed this month by the Northeast (+1.6%). The West (-5.9%) remains the weakest region.

“June is the fifth consecutive month in which home prices have increased across the U.S. With 2023 half over, the National Composite has risen 4.7%, which is slightly above the median full calendar year increase in more than 35 years of data. We recognize that the market's gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month's report are consistent with an optimistic view of future results.”

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.