Existing Home Sales Slide Again in October
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High mortgage rates and low affordability continue to batter the beleaguered U.S. residential market. Existing home sales tumbled 4.1% in October to the lowest level since August 2010. That marks the fifth straight decline and was nearly double the 2.2% drop in September. The decrease was broad-based with single family homes falling 4.2% – the biggest drop since November 2022 – and condos/co-ops sliding a more modest 2.4%. Sales slid in the Northeast, South and West but were unchanged in the Midwest. Existing home sales are down 14.6% from a year ago and have fallen annually for 27 months in a row. At the end of October there were 1.15 million homes for sales, down 5.7% from a year earlier. That represents a 3.6-month supply at the current sales pace, well shy of the six months that is typical of a balanced market. Tight inventory is putting upward pressure on home prices with the median price climbing 3.4% year-on-year to an all-time high (on a seasonally-adjusted basis), up from the 2.4% gain in September. The median price has risen annually for the past four months following four straight declines.
Bottom line: There is no end in sight to the U.S. housing market slump as long as mortgage rates remain elevated and existing home inventory stays lean, with little incentive for homeowners to list their properties and assume a mortgage with a much higher interest rate.
Table 1 - United States - Existing Home Sales
(millions of units: a.r.)
| (average) | ||||||
| Oct | Sep | Aug | 3-mnth | 12-mnth | ||
| Total Existin Home Sales | 3.79 | 3.95 | 4.04 | 3.93 | 4.14 | |
| (m/m % chng) | -4.1 | -2.2 | -0.7 | -6.91 | -14.62 | |
| Northeast | 0.48 | 0.50 | 0.48 | 0.49 | 0.51 | |
| Midwest | 0.93 | 0.93 | 0.97 | 0.94 | 0.99 | |
| South | 1.69 | 1.82 | 1.84 | 1.78 | 1.90 | |
| West | 0.69 | 0.70 | 0.75 | 0.71 | 0.75 | |
| Median Price (US$ 000s) | 391.8 | 392.8 | 404.1 | 396.2 | 385.5 | |
| (y/y % chng) | 3.4 | 2.4 | 3.2 | |||
| Months' Supply | 3.6 | 3.4 | 3.3 | 3.4 | 3.1 | |
| 1 (3-mnth % chng) | 2 (12-mnth % chng) | |||||
Source: BMO Economics, Haver Analytics
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Jay Hawkins
Senior Economist Economics
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High mortgage rates and low affordability continue to batter the beleaguered U.S. residential market. Existing home sales tumbled 4.1% in October to the lowest level since August 2010. That marks the fifth straight decline and was nearly double the 2.2% drop in September. The decrease was broad-based with single family homes falling 4.2% – the biggest drop since November 2022 – and condos/co-ops sliding a more modest 2.4%. Sales slid in the Northeast, South and West but were unchanged in the Midwest. Existing home sales are down 14.6% from a year ago and have fallen annually for 27 months in a row. At the end of October there were 1.15 million homes for sales, down 5.7% from a year earlier. That represents a 3.6-month supply at the current sales pace, well shy of the six months that is typical of a balanced market. Tight inventory is putting upward pressure on home prices with the median price climbing 3.4% year-on-year to an all-time high (on a seasonally-adjusted basis), up from the 2.4% gain in September. The median price has risen annually for the past four months following four straight declines.
Bottom line: There is no end in sight to the U.S. housing market slump as long as mortgage rates remain elevated and existing home inventory stays lean, with little incentive for homeowners to list their properties and assume a mortgage with a much higher interest rate.
Table 1 - United States - Existing Home Sales
(millions of units: a.r.)
| (average) | ||||||
| Oct | Sep | Aug | 3-mnth | 12-mnth | ||
| Total Existin Home Sales | 3.79 | 3.95 | 4.04 | 3.93 | 4.14 | |
| (m/m % chng) | -4.1 | -2.2 | -0.7 | -6.91 | -14.62 | |
| Northeast | 0.48 | 0.50 | 0.48 | 0.49 | 0.51 | |
| Midwest | 0.93 | 0.93 | 0.97 | 0.94 | 0.99 | |
| South | 1.69 | 1.82 | 1.84 | 1.78 | 1.90 | |
| West | 0.69 | 0.70 | 0.75 | 0.71 | 0.75 | |
| Median Price (US$ 000s) | 391.8 | 392.8 | 404.1 | 396.2 | 385.5 | |
| (y/y % chng) | 3.4 | 2.4 | 3.2 | |||
| Months' Supply | 3.6 | 3.4 | 3.3 | 3.4 | 3.1 | |
| 1 (3-mnth % chng) | 2 (12-mnth % chng) | |||||
Source: BMO Economics, Haver Analytics
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