Existing vs. new home sales: sales have peaked, expect prices to soon peak
Existing vs. new home sales: sales have peaked, expect prices to soon peak
I normally don’t pay much attention to existing home sales. Even though they constitute about 90% of the housing market, they have much less impact on the economy overall than new home sales (because all of the economic activity involved in building the house, and then landscaping the outside and furnishing the inside).
But they can be a comparison with new home sales, particularly as they are a competing product. And the procession of data is the same: interest rates lead sales, which in turn lead prices, which in turn lead inventory.
Existing home sales for April confirmed what we have already seen with new home sales: the market peaked at the turn of the year. Sales declined 2.7%, seasonally adjusted, compared with March, to 5.85 million units annualized. That is the lowest number since last July’s 5.90 million. It is about -12% below the January peak of 6.66 million. Below I show both new (blue) and existing (red) home sales for the past year:
Earlier this week we saw that housing permits and starts are both also off of their highest point of December and January.
Median prices, however, continued to climb to a new all time high of $341,600, a YoY gain of 19.1%, the highest YoY gain on record. Inventory continued to decline, to less than 2 months’.
I fully expect prices to reverse in the coming months, and I also expect inventory to increase.
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I live in Denver and see nothing to support your forecast.
Sales are down because no one is putting their house on the market.
Prices are still exploding.
Zillow is only showing 2 homes for sale in our town, the lowest number I have ever seen in the last 25 years. It does not include the one across the street which is an exclusive listing and way overpriced as well.
If there is a shortage of homes for sale, there may be a shortage of buyers, at least for overpriced homes.
since this was posted, sales of new single family homes in March were revised from what was a fourteen year high annual rate of 1,021,000 reported last month down to an annual rate of 917,000, while new home sales in February, initially reported at an annual rate of 775,000 and revised to a 846,000 rate last month, were revised to an annual rate of 854,000, & while new home sales in January, initially reported at an annual rate of 923,000 and revised from a 948,000 rate to a 1,010,000 rate last month, were revised to a 993,000 a year rate with today’s release.
April new home sales came in at a 863,000 annual rate, pending (±11.2 percent) revisions over the coming three months…
today’s report also indicated that the average new home sales price was at a record high $435,400, up from the $400,500 average sales price in March, and up from the average sales price of $360,300 in April a year ago…
as we all know, prices can only go higher, so y’all better buy now at whatever price they’re asking…