Macro Flash Report

Housing Sales

Takeaway:

The October housing data, while mixed, shows underlying signals of stability in a difficult climate. This leads us to believe that although mortgage rates are unlikely to have a steady decline, housing activity should improve from here.

New & Existing Home Sales

In October, New Home Sales dropped by -17.3% from the prior month to an annualized rate of 610k, missing the market expected 725k and down sharply from 738k in September. This marks the steepest decline since 2013 and the lowest sales level since October 2022. This downturn was largely driven by hurricane-related disruptions in the South, where sales plunged by -28%, compounded by ongoing affordability issues.

Conversely, Pending Home Sales rose by 2% month-over- month in October, surpassing the forecasted -2% decline and building on September’s upwardly revised 7.5% surge. On an annual basis, Pending Sales jumped by 5.4%, the largest increase since May 2021. These gains suggest that despite affordability challenges, homebuying momentum is building.

Existing Home Sales grew by 3.5% in October to an annual rate of 3.96m, rebounding from September’s 14-year low of 3.83m and exceeding the anticipated 3.93m. This improvement is a signal that although mortgage rates remain restrictive, there is underlying demand.