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If anything, today's Existing Home Sales data is a bit of a bright spot in an otherwise gloomy housing market. Sure, the annual pace of sales is as low as it has been in a decade (brief stint during 2020 lockdowns notwithstanding), but the pace of declines has leveled off substantially over the past few months. July, August, and September have all been inside a range of 4.71-4.81m sales. This isn't to say "move along, nothing to see here. Everything's fine." Clearly, this is a massive decline from the peak, and this may only be a pause before continuing lower. But there was no way to avoid a substantial decline, especially in light of the fastest rate spike since the 80s up to levels not seen in at least 20 years. Moreover, a decline to long-term inventory lows is very different than the last major downturn in sales. "Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory," according to Lawrence Yun, chief economist at the NAR. "The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today." Here's the same chart as above with a bit more time included to show the inventory building into the crisis. If there's a cause for concern, it would be the precedent from 40 years ago. Sales have already declined nearly as much, but interest rates have only risen about half as much.
Housing News
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If anything, today's Existing Home Sales data is a bit of a bright spot in an otherwise gloomy housing market. Sure, the annual pace of sales is as low as it has been in a decade (brief stint during 2020 lockdowns notwithstanding), but the pace... (read more)
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Mortgage Rate Watch
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Let's talk about exactly what it means to see a mortgage rate headline in the news, or even from some seemingly official index or survey. In fact, let's start with rate quotes themselves. There are several ways of doing it and several re... (read more)
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MBS Commentary
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Everyone is tired of the persistent sell-off in the bond market, but weariness is no match for the negative momentum. We've long since run out of ways to make new observations about the same old phenomenon. At times like this, we're resigned to... (read more)
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Rob Chrisman
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While we had news today of the British Prime Minister resigning, yesterday my doctor asked if anyone in my family suffers from mental illness. I replied, "No, we all seem to enjoy it." Suffering from a lack of liquidity is the death knell for lenders... (read more)
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