The housing market has deteriorated further in September. Sales of new single-family houses in the US fell 5.5% m/m to 553 thousand, following a downwardly revised 3.0% decline in August. It is the lowest rate since December 2016 and is worse than market expectations of 625 thousand homes sold. None of the four regions of the country booked sales increases. Sales fell by 1.5% in the South, partly reflecting the impact of Hurricane Florence. Overall, sales are down 4.1% from a year ago.
Total housing inventory at the end of September decreased from 1.91 million units in August to 1.88 million existing homes available for sale, and is up from 1.86 million a year ago. Unsold inventory is at a 4.4-month supply at the current sales pace, up from 4.3 last month and 4.2 months a year ago.
Properties remained unsold for 32 days in September, up from 29 days the month before, but down from 34 days a year ago. 47% of homes sold in September were on the market for less than a month.
There is little doubt that the housing market has lost momentum. Much of the cause for the weakness in the market are rising property prices and higher mortgage rates. It is likely that this is only the beginning of a trend and will impact the overall economy. There is a good chance that the Fed will hike its base rate at its next FOMC meeting November 6-7. If that happens the housing market will get hit one more time. Its is quite possible that the housing market will deteriorate considerably during the rest of 2018.
On a regional basis, September existing-home sales in the Northeast decreased 2.9%, 5.6% below a year ago. The median price in the Northeast was $286,200 was up 4.1% from September 2017. In the Midwest, existing-home sales remained the same as last month at an annual rate of 1.28 million in September, but are down 1.5% percent from a year ago. The median price in the Midwest was $200,200, up 1.9% 2017. Existing-home sales in the South decreased 5.4% to an annual rate of 2.11 million in September, down from 2.12 million a year ago. The median price in the South was $223,900, up 3.0% from a year ago. Existing-home sales in the West fell 3.6% to an annual rate of 1.08 million in September, 12.2% below a year ago. The median price in the West was $388,500, up 4.1% from September 2017.