Some Nuances in The Existing Home Sales Data

If anything, today's Existing Home Sales data is a bit of a bright spot in an otherwise gloomy housing market. Sure, the annual pace of sales is as low as it has been in a decade (brief stint during 2020 lockdowns notwithstanding), but the pace of declines has leveled off substantially over the past few months. July, August, and September have all been inside a range of 4.71-4.81m sales. This isn't to say "move along, nothing to see here. Everything's fine." Clearly, this is a massive decline from the peak, and this may only be a pause before continuing lower. But there was no way to avoid a substantial decline, especially in light of the fastest rate spike since the 80s up to levels not seen in at least 20 years. Moreover, a decline to long-term inventory lows is very different than the last major downturn in sales. "Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory," according to Lawrence Yun, chief economist at the NAR. "The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today." Here's the same chart as above with a bit more time included to show the inventory building into the crisis. If there's a cause for concern, it would be the precedent from 40 years ago. Sales have already declined nearly as much, but interest rates have only risen about half as much.

October 20, 2022 Download our Mobile App: Download our Mobile App: Housing News Some Nuances in The Existing Home Sales Data If anything, today's Existing Home Sales data is a bit of a bright spot in an otherwise gloomy housing market. Sure, the annual pace of sales is as low as it has been in a decade (brief stint during 2020 lockdowns notwithstanding), but the pace... (read more) Mortgage Rate Watch Mortgage Rates Have Been Over 7% For a While--Easily as High as 7.375% Today Let's talk about exactly what it means to see a mortgage rate headline in the news, or even from some seemingly official index or survey. In fact, let's start with rate quotes themselves. There are several ways of doing it and several re... (read more) MBS Commentary Bond Market Pricing In Things It Doesn't Necessarily Expect to See Everyone is tired of the persistent sell-off in the bond market, but weariness is no match for the negative momentum. We've long since run out of ways to make new observations about the same old phenomenon. At times like this, we're resigned to... (read more) Rob Chrisman Hedging, Automation, Community Lending, DPA Products; STRATMOR on Customer Experience While we had news today of the British Prime Minister resigning, yesterday my doctor asked if anyone in my family suffers from mental illness. I replied, "No, we all seem to enjoy it." Suffering from a lack of liquidity is the death knell for lenders... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.37% +0.15% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.37% +0.15 0.00 15 Yr. Fixed 6.68% +0.13 0.00 30 Yr. FHA 6.88% +0.13 0.00 30 Yr. Jumbo 6.25% +0.10 0.00 5/1 ARM 6.55% +0.10 0.00 30 Yr. VA 6.90% +0.13 0.00 Updates Daily - Last Update: 10/20 15 Yr. Fixed Rate 6.68% +0.13% Rate Change Points Freddie Mac 30 Yr. Fixed 6.94% +0.02 0.90 15 Yr. Fixed 6.23% +0.14 1.10 5/1 Yr. ARM 5.71% -0.10 0.40 Updates Weekly - Last Update: 10/20 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.94% +0.13 0.95 15 Yr. Fixed 6.09% -0.03 1.18 30 Yr. Jumbo 6.31% +0.06 0.67 Updates Weekly - Last Update: 10/19 MBS / Treasuries UMBS 30YR 5.0 95.14 -0.58 Price / Yield Change MBS UMBS 5.0 95.14 -0.58 UMBS 5.5 97.48 -0.53 GNMA 5.0 95.80 -0.50 GNMA 5.5 97.95 -0.45 Pricing as of: 10/20 5:31PM EST 10 Year US Treasury 4.2283 +0.0906 Price / Yield Change US Treasury 2 YR Treasury 4.612 +0.052 5 YR Treasury 4.448 +0.090 7 YR Treasury 4.358 +0.091 10 YR Treasury 4.228 +0.091 30 YR Treasury 4.223 +0.094 Pricing as of: 10/20 5:31PM EST Latest Video Existing homes inventory drops 23.8% from last year Service inflation has lagged and it's distorting the Fed's view on inflatio... We'll continue to see double-digit declines in home sales, says KPMG's Swon... The 2pm Bond Report - October 20, 2022 Around the Web CNBC Existing home sales fall to a 10-year low in September, as mortgage rates soar CNBC Fed's Harker sees 'lack of progress on inflation,' expects aggressive rate hikes ahead Calculated Risk Blog Realtor.com Reports Weekly Active Inventory Up 34% Year-over-year; New Listings Down 15% CNBC UK Prime Minister Liz Truss resigns after failed budget and market turmoil Calculated Risk Blog Weekly Initial Unemployment Claims decrease to 214,000 Calculated Risk Blog Fed's Beige Book: "Rising mortgage rates and elevated house prices further weakened single-family starts and sales" bbg Bullard Says Fed Must ‘Follow Through’ on Anticipated Rate Hikes CNBC 2-year Treasury yield tops 4.6% as recession fears grow louder CNBC 66% of American workers are worse off financially than a year ago due to inflation, report finds Reuters Fed's Kashkari says labor shortages still a big issue for business CNBC Japanese yen hits 150 against the U.S. dollar, weakest levels not seen since August 1990 CNBC European markets head for negative open as economic uncertainty continues Calculated Risk Blog AIA: Architecture Billings Index "Moderates but remains healthy" in September

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