This week’s news will probably be dominated by Wilma and Fitzgerald. And the top economic story will likely be Q3 GDP. But I’ll also be looking at the Existing Home Sales and New Home Sales reports for further clues of a housing slowdown.
Expectations are for strong volumes for both existing and new home sales. The consensus estimate is for an annual rate of 7.2 million existing homes sold, just below the record of 7.35 million in June and the still strong 7.29 million units in August.
As a reminder, existing home sales are reported at the close of escrow, usually 30 to 60 days after the contract is signed. New Home Sales are reported in the month the contract is signed, so New Home Sales are a more up-to-date indicator of activity in the housing market.
For new homes, the consensus estimate is for an annual rate of 1.25 million homes, slightly better than for August. Although sales volumes will probably still be strong, it will be interesting to see if inventories have continued to rise. For existing homes, inventories hit 2.856 million in August, the highest level since 1989. And for new homes, inventories set a record of 480 thousand units in August.
California has lead the housing boom, so the following articles might offer clues to the impact of a slowdown. The San Diego Union Tribune reports: California lost 23,700 jobs in September, but statewide construction hiring was still strong:
The construction sector saw the largest gain in August, up by 3,300 jobs on a seasonally adjusted basis. … For the year, the construction industry has added the most jobs, 58,500, or an increase of 6.8 percent.
Although construction was still strong statewide, San Diego, the first major area to see a housing slowdown, saw construction layoffs: Construction layoffs could signal trend
“There might be some seasonal reasons for the construction losses, but the decline could be a sign that our overall employment growth is slowing,” said Alan Gin, economist at the University of San Diego.
Gin said the construction layoffs are one more sign that the housing boom, which has created jobs for builders, mortgage brokers and real estate agents, is winding down.
“The number of home sales is down, price appreciation on most homes is not as great as it used to be, and it’s taking longer to sell homes,” Gin said. “That could mean less growth in construction work.”
There were signs of trouble in other employment sectors as well.
Financial services cut 200 jobs last month, largely related to real estate and mortgage operations.
A few hundred jobs is somewhat insignificant, except it might indicate a trend change.
Here is an interesting update and first hand account of local conditions: Washington, DC Area Update
My best wishes to everyone in south Florida: please stay safe! CR Calculated Risk