Housing Falls to Another Low: October 21 – 25

Home sales remained weak in September. Here are the five things we learned from U.S. economic data released during the week ending October 25.

Sales of previously owned homes fell to a 14-year low in September. The National Association of Realtors reports existing home sales declined 1.0 percent to a seasonally adjusted annualized rate (SAAR) of 3.980 million units (its lowest point since October 2010). Sales were off 3.5 percent from a year earlier. Sales declined during the month in three Census regions, with the West’s 4.1 percent gain being the exception. Inventories continued to expand, growing 1.5 percent to 1.390 million units (the equivalent of a 4.3-month supply). Inventories have swelled 23.0 percent over the past 12 months. The median sales price of $404,500 was up 3.0 percent from a year earlier. The press release notes, “factors usually associated with higher home sales are developing,” such as growing inventories, lower interest rates, and job gains.

Meanwhile, new home sales increased in September. Sales of new single-family homes grew 4.1 percent to a seasonally adjusted annualized rate (SAAR) of 738,000. The Census Bureau data series was up 6.3 percent from a year earlier. Relative to a year ago, sales were up sharply in the Midwest (+14.9 percent) and South (+14.7 percent) but down in the Northeast (-22.2 percent) and West (-10.9 percent). There were 470,000 new homes available for sale at the end of September, up 0.4 percent for the month and 8.0 percent from a year earlier. The median sales price of $426,300 essentially matched a year earlier. 

Forward-looking measures continued to signal weakness in September. The Conference Board’s Leading Economic Index (LEI) dropped a half percentage point to 99.7 (2016=100). The LEI has declined 2.6 percent over the past six months. Five of ten LEI components positively contributed to the index, led by stock prices and initial jobless claims. The Coincident Economic Index (CEI) edged up 0.1 percent to 112.9, leaving the measure up 0.9 percent over the past six months. Three of four CEI components made positive contributions to the index, led by personal income and nonfarm payrolls. The Lagging Economic Index (LAG) lost 3/10^ths of a percentage point to 118.9. The LAG was 0.2 percent below six-month-ago levels. The Conference Board anticipates “moderate growth at the close of 2024 and into early 2025.”

The U.S. economy grew at a slower pace in September. The Chicago Fed National Activity Index (CFNAI) shed 27 basis points to -0.28 (its lowest reading since April). A reading below 0.00 indicates the U.S. economy grew slower than its historical average. Thirty-eight of 85 CFNAI components made positive contributions to the index, with the other 47 having a negative impact. All four major categories of components dragged down the headline index: production (-0.21), sales/orders/inventories (-0.03), employment (-0.03), and personal consumption/housing (-0.01). The CFNAI’s three-month moving average shed five basis points to -0.19.

Consumer sentiment held steady in October. The University of Michigan Index of Consumer Sentiment inched up 4/10^ths of a point to a seasonally adjusted 70.5. The index was up 10.5 percent from a year earlier. The current conditions index added 1.6 points to 64.9 (-8.1 percent versus October 2023), while the expectations index slipped 3/10^ths of a point to 74.1 (+25.0 percent versus October 2023). The press release noted that “a sizable share of consumers will likely update their economic expectations based on the results of the election.” One-year inflation expectations held steady at +2.7 percent, with long-term inflation anticipated at +3.0 percent).

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending October 19, 2024, First-Time Claims, seasonally adjusted): 227,000, -15,000 vs. the previous week, +14,000 vs. the same week a year earlier). 4-week moving average: 238,500 (+13.3% vs. the same week a year earlier).
• Durable Goods (September 2024, New Orders for Manufactured Durable Goods, seasonally adjusted): $284.8 billion (-0.8% vs. August 2024).
• State Employment (September 2024, Nonfarm Payrolls, seasonally adjusted): Increased in 5 states and the District of Columbia and was unchanged in 45 states vs. August 2024. Increased in 30 states and Unchanged in 20 states and the District of Columbia.
• Beige Book

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