Preview: Due October 12 - U.S. September Existing Home Sales - Marginal correction higher, but trend is falling
We see scope for a marginal upward correction in September existing home sales, by 0.5% to 4.00m after three straight declines. However rising mortgage rates and Fed tightening are likely to bring renewed slippage in Q4.
August pending home sales, which are designed to predict existing home sales, saw a marginal increase, while new home sales also picked up in August. However September’s NAHB homebuilders index slipped back after a modest August rise and MBA house purchase indices were marginally softer in December. September’s Fed tightening is more an issue for Q4 sales but rising mortgage rates were a concern even before the Fed tightened.
We expect upward corrections in the Midwest and South after three straight declines in each, flat sales in the Northeast and renewed slippage in the West after a flat August. We expect the median price to fall by 2.0% on the month, but this would lift yr/yr growth to 2.0% from 1.6%. We expect sales to be down by 2.0% yr/yr, compared to a 1.2% yr/yr decline in August.
