A Slightly Less Gloomy Way to View Another Big Drop in Existing Home Sales

The state of the housing market in 2022 is well known by now. The sharpest rate spike in 40 years to the highest rates in 20 years combined with the overvaluation from 2 years of brutally fast appreciation to create a rapid cooling in demand and, more recently, prices. Slightly less obvious to those outside the industry is the extreme and ongoing inventory crunch. Units available for sale continue treading water at record lows. This is noticeably different from the most recent example of plummeting sales (2006-2008) when inventory began stacking up almost immediately. We can get a slightly more focused look at the "sales vs inventory" metric by simply subtracting one from the other. The following chart shows sales vs inventory. This is a better gauge of the contraction in sales. In this light, sales are right back in line with pre-covid levels as opposed to back at 2012's levels. None of the above is intended to "cheer-lead" a gloomy housing situation, because it's certainly not upbeat right now. Rather, the only goal is to adjust the level of gloom to acknowledge the abysmal inventory conditions. Other highlights from today's data: Time on market: 21 days vs 19 days previously First time buyers = 28% of the market, 29% previously Cash sales = 26% up from 22% previously Investors bough 16%, up from 15% previously Comments from NAR Economist Lawrence Yun: "Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers. In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%."

November 18, 2022 Download our Mobile App: Download our Mobile App: Housing News A Slightly Less Gloomy Way to View Another Big Drop in Existing Home Sales The state of the housing market in 2022 is well known by now. The sharpest rate spike in 40 years to the highest rates in 20 years combined with the overvaluation from 2 years of brutally fast appreciation to create a rapid cooling in demand an... (read more) MBS Commentary Traders Turning Attention to December 13th Already Modest Losses But Uneventful in The Bigger Picture 'Tis the season for the bond market to enter holiday trading patterns and that fact was on full display today. Volumes were much lower than the rest of... (read more) Mortgage Rate Watch Fed Says: Don't Get Too Excited About Rates Just Yet There's no question that last week was an exciting one for rates. On Wednesday, the average 30yr fixed was fairly close to the highest levels since 2002. The following afternoon, it had fallen more than half a percent to the lowest level in nearly 2 ... (read more) Rob Chrisman TPO, HELOC Workflow, Processing, PPE, API Tools; CFPB Fines Carrington $5.25mm Few base their company or family’s savings on the inherent risk in a prediction. But… On a big scale, and we’ve been hearing forecasts of a recession for a year now, JPMorgan Chase’s economists opine that the economy will slip into a mild recession i... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.63% -0.02% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.63% -0.02 0.00 15 Yr. Fixed 6.05% -0.05 0.00 30 Yr. FHA 6.25% -0.05 0.00 30 Yr. Jumbo 6.08% -0.03 0.00 5/1 ARM 6.23% +0.01 0.00 30 Yr. VA 6.30% -0.05 0.00 Updates Daily - Last Update: 11/18 15 Yr. Fixed Rate 6.05% -0.05% Rate Change Points Freddie Mac 30 Yr. Fixed 6.61% -0.47 0.00 15 Yr. Fixed 5.98% -0.40 0.00 Updates Weekly - Last Update: 11/17 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.90% -0.24 0.56 15 Yr. Fixed 6.27% -0.13 0.73 30 Yr. Jumbo 6.51% +0.01 0.64 Updates Weekly - Last Update: 11/16 MBS / Treasuries UMBS 30YR 5.0 98.70 -0.23 Price / Yield Change MBS UMBS 5.0 98.70 -0.23 UMBS 5.5 100.41 -0.25 GNMA 5.0 99.17 -0.22 GNMA 5.5 100.47 -0.33 Pricing as of: 11/18 5:31PM EST 10 Year US Treasury 3.8326 +0.0632 Price / Yield Change US Treasury 2 YR Treasury 4.539 +0.079 5 YR Treasury 4.012 +0.075 7 YR Treasury 3.934 +0.067 10 YR Treasury 3.833 +0.063 30 YR Treasury 3.930 +0.052 Pricing as of: 11/18 5:31PM EST Latest Video How to play the bond market ahead of a recession, with JPMorgan's Bob Miche... Existing home sales drop 5.9 percent in October, 28.4 percent year-over-yea... The 2pm Bond Report - November 18, 2022 The 9am Bond Report - November 18, 2022 Around the Web CNBC Buyers need a six-figure income to afford a 'typical' home, report finds. Here's how to reduce the cost Calculated Risk Blog More Analysis on October Existing Home Sales CNBC Fed's Collins expresses hope that inflation can be tamed without hitting jobs Calculated Risk Blog Realtor.com Reports Weekly Active Inventory Up 45% Year-over-year; New Listings Down 18% CNBC Insana: The 7% solution on interest rates could come back to haunt the Federal Reserve Reuters ECB to begin great cash mop-up as banks repay billions in loans CNBC Rent growth slows to the lowest level in 18 months Calculated Risk Blog October Housing Starts: Record Number of Housing Units Under Construction CNBC Treasury yields climb as markets ponder future Fed interest rate policy Calculated Risk Blog Housing Starts Decreased to 1.425 million Annual Rate in October CNBC Fed's Bullard says rate hikes have had 'only limited effects' on inflation so far Calculated Risk Blog Weekly Initial Unemployment Claims decrease to 222,000 Eye on Housing Flat Readings for Single-Family Built-for-Rent

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