The latest numbers on housing are further evidence of a weakening US economy in the months ahead. September existing home sales fell 3.4% following a 2% drop in August. The September sales number is the smallest since November 2015. Part of the problem with sales is that the supply of available homes for sale declined to 1.88 million from 1.91 million. Year-on-year existing home sales fell 4.1%.
Adding to the low inventory, housing starts in September declined 5.3% from August when starts had risen 7.1%. Meanwhile, building permits fell 0.6%. Permits were at their lowest level since May 2017. Multifamily dwelling permits dropped 9.3%, while single-family units rose 2.9%.
The latest hurricane only modestly impacted the housing market.
One major factor curtailing home sales is the increase in interest rates. The Federal Reserve is keeping money relatively tight and intends to hike rates another quarter point at the next FOMC meeting November 7-8. Indications are that the rate hike will happen even with indications of a softer economy and opposition from President Trump.