According to the National Association of Manufacturers’ (NAM) Monday Economic for this week, existing home sales fell 5.9% from 4.71 million units at the annual rate in September to 4.43 million units in October – a decline for the ninth straight month. Affordability through soaring costs and higher mortgage rates has dampening demand. On a YoY basis, existing home sales plummeted 28.4% from 6.19 million units in October 2021.
Unsold inventory of existing homes for sale on the market inched up to 3.3 months in October from 3.1 months in September. This measure has trended higher since hitting a record low of 1.6 months in January.
New residential construction activity fell 4.2% from 1,488,000 units at the annual rate in September to 1,425,000 units in October. On a YoY basis, new housing starts have plummeted 20.8% from 1,563,000 units in October 2021. New housing permits – a proxy for future residential construction – decreased 2.4% from an annualized 1,564,000 units in September to 1,526,000 units in October. On a YoY basis, housing permits have fallen 10.1% from 1,698,000 units in October 2021.
According to the NAHB and Wells Fargo, the Housing Market Index plummeting from 38 in October to 33 in November – the lowest value since April 2020. Readings below 50 are consistent with more builders being negative than positive in their views of the housing market. The index of current activity for single-family homes dropped from 45 to 39, and the index for the traffic of potential buyers deteriorated further from 25 to 20.