Pending home sales reaches its lowest level on record (2001)
- Prior month +1.1% (they were expecting -1.8%) revised to 1.0%
- Pending home sales -1.5% versus -2.0% expected
- Pending home index 71.4 versus 72.5 last month (revised from 72.6). This is the lowest level on record (since 2001).
Looking at the different regions:
- Northeast +2.7%
- Midwest -0.4%
- South -1.9%
- West -6.0%
Existing home sales last week came in at 3.79M annualized sales pace versus 3.90M estimate and 3.95M last month.
New home sales this week came in much weaker than expected at 679K vs 724K expected and 719K last month.
Lawrence Yun, NAR chief economist said:
“During October, mortgage rates were at their highest, and contract signings for existing homes were at their lowest in more than 20 years. Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied. Multiple offers, of course, yield only one winner, with the rest left to continue their search.”
Yun added:
“Home sales are rising in places where more inventory is available. Sales for properties priced above $750,000 were higher than a year ago, because there is more inventory at this price point than what we saw last October. Additionally, newly built home sales are up 4.5% year-to-date due to homebuilders’ ability to create more inventory.1 It is vital that we continue to focus on boosting housing supply by all means in all corners of the country over the coming months.”
The NAR last month came out with expectations for 2024.
- The National Association of Realtors (NAR) forecasts a 6.9% average for the 30-year fixed mortgage rate in 2023, decreasing to an average of 6.3% in 2024.
- The unemployment rate is expected to decrease to 3.7% in 2023 and then rise to 4.1% in 2024.
- NAR anticipates a 17.5% decrease in existing-home sales in 2023, dropping to 4.15 million, followed by a 13.5% increase to 4.71 million in 2024.
- The national median existing-home prices are projected to remain stable in 2023, increasing slightly by 0.1% to $386,700, and then rising by 0.7% to $389,500 in 2024.
- Housing starts are predicted to drop 10.4% from 2022 to 2023, reaching 1.39 million, and then increase by 6.5% to 1.48 million in 2024.
- The National Association of Realtors (NAR) predicts a 4.5% increase in newly constructed home sales in 2023, reaching 670,000, attributed to additional inventory in this market segment.
- NAR forecasts a further 19.4% rise in new home sales in 2024, totaling 800,000.
- The national median new home price is projected to decrease by 5.9% in 2023, falling to $430,800.
- In 2024, the median new home price is expected to recover, increasing by 3.5% to $445,800.