Existing Home Sales from the NAR via the St. Louis Fed.

Existing-Home Sales Chart Notes

• There is a delay in the data today from the St. Louis Fed, so I entered many months from other sources. The NAR revised December from 3.78 million to 3.88 million.
• Charts in this post subject to revision. I have requested a data update from the St. Louis Fed.

The National Association of Realtors reports Existing-Home Sales Rose 3.1% in January.

Existing-Home Highlights

• Existing-home sales expanded 3.1% in January to a seasonally adjusted annual rate of 4.00 million. Sales declined 1.7% from the prior year.
• The median existing-home sales price climbed 5.1% from January 2023 to $379,100 – the seventh consecutive month of year-over-year price gains.
• Total housing inventory registered at the end of January was 1.01 million units, up 2.0% from December and 3.1% from one year ago (980,000). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in December but up from 2.9 months in January 2023.

Existing-Home Sales Seasonally Adjusted

Existing-Home Sales Supply

Existing-Home Sales Long Term

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Existing-home sales chart courtesy of Trading Economics.

Transaction Crash

• Existing home sales have crashed to a level seen in the late 1970s.
• Population-adjusted this is an enormous transaction crash, but not a price crash.

Comments of the Day

“The median home price reached an all-time high for the month of January. Multiple offers are common on mid-priced homes, and many homes were still sold within a month.”

“The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.” NAR Chief Economist Lawrence Yun

Median Price All-Time High

Median prices are at an all-time high. Lovely.

The Fed is concerned about this as it should be. However, the Fed itself is to blame.

Fed Minutes Show Concern Over Asset Prices, Housing, and Leverage

Yesterday, the Fed released minutes of the January FOMC meeting. The minutes showed four notable things.

Four Notable Things

• System’s financial vulnerabilities are notable
• Asset valuation pressures remained notable
• Insurers had been increasing their investments in risky corporate debt. Funding risks were also characterized as notable.
• Leverage in the financial sector was characterized as notable.

For more details and discussion please see Fed Minutes Show Concern Over Asset Prices, Housing, and Leverage

Importantly, we have notable financial leverage and notable asset valuation pressures.

Yun’s bragging ties straight into several recent posts of mine.

The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate

On average, the economy looks OK. But averages are misleading. Several large groups of people are struggling. They all have one thing in common.

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Case-Shiller home price index, CPI rent index, and the index of hourly earnings for production and nonsupervisory workers.

Who’s Unhappy?

Those looking to buy a home but cannot afford the record high prices, are not faring well in this economy.

The last great time to buy a home was in 2012. Over the next eight years, home prices moved further and further away from wages.

When the Covid pandemic hit in 2020, we had record QE, record fiscal stimulus, mortgage rates hit record lows, and inflation hit the highest levels in 40 years.

In response, home prices soared out of sight. Worse yet, the price of rent rose at least 0.4 percent for 28 straight months.

For discussion and 9 additional charts, please see The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate

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