Housing Market Standstill 

(2/5) From August to September, home-sale prices fell 0.5%.

Still, prices rose 8% year over year due to persistent tight supply and inflation.

— Redfin (@Redfin) October 19, 2022

That's not a standstill. It's a collapse. So is this. 

60,000 Deals Called Off

(4/5) A record 22% of homes for sale had a price drop in September as homebuyer bidding wars eased. pic.twitter.com/gMaDerBUsd

— Redfin (@Redfin) October 19, 2022

About 60,000 deals were called off, equal to 17% of homes that went under contract—the highest share on record aside from March 2020.

(5/5) Zhao continued: "With inflation still rampant, the Federal Reserve will likely continue hiking interest rates. That means we may not see high mortgage rates—the primary killer of housing demand—decline until early to mid-2023."

— Redfin (@Redfin) October 19, 2022

For the complete Redfin report, please see Home Sales, Listings Plunge Over 20% in September—Most on Record Aside From Pandemic Start 

NAR Existing Home Sales Report

The National Association of Realtors existing home sales report comes out tomorrow. 

The Bloomberg Econoday consensus is 4.695 million sales at a Seasonally Adjusted Annualized Rate (SAAR), down from 4.800 million in August.

That would be a decline of 2.2 percent vs the Redfin reported 2.7 percent. 

Housing Starts Resume Crash in September as Widely Expected

Seasonally-adjusted, annualized (SAAR) housing data from commerce department, chart by Mish

As noted earlier today, Housing Starts Resume Crash in September as Widely Expected

Comments on the Fed

• The Fed actively created a housing bubble a second time, by holding interest rates too low, to long again.
• The Fed added mortgages to its balance sheet all the way to March of 2022 despite surging inflation.

Now, the Fed actively seeks to pop the housing bubble that it created. Given policy acts with a lag, the Fed is likely to overshoot with a policy error in the opposite direction.

Is this any way to run a business?

Decline Every Month This Year 

According to the NAR, Existing home sales have decline every month since January. September will not be an exception. 

Weakness like this is seldom seen outside of recessions.

Inflation Out of Hand

In related news, please note Renters Surpass Homeowners in 41% of Zip Codes in the 50 Largest U.S. Cities

To understand how far behind the curve the Fed let inflation progress, please see CPI Much Hotter Than Expected Led by a Surge in Price of Food and Shelter

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