MetroIntelligence Economic Update by P. DUFFY
Existing home sales slump for 9th consecutive month, inventory at just 3.3 months’ supply
Existing-home sales faded for the ninth month in a row to a seasonally adjusted annual rate of 4.43 million. Sales fell 5.9% from September and 28.4% from one year ago. The median existing-home sales price rose to $379,100, an increase of 6.6% from the previous year. The inventory of unsold existing homes slipped for the third consecutive month to 1.22 million at the end of October, or the equivalent of 3.3 months’ supply at the current monthly sales pace.
October Leading Economic Index falls for 8th straight month as inflation remains high
The October US Leading Economic Index (LEI) fell for an eighth consecutive month, suggesting the economy is possibly in a recession. The downturn in the LEI reflects consumers’ worsening outlook amid high inflation and rising interest rates, as well as declining prospects for housing construction and manufacturing. The Conference Board forecasts real GDP growth will be 1.8 percent year-over-year in 2022, and a recession is likely to start around yearend and last through mid-2023.
New single-family home size trending lower
According to third quarter 2022 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area declined to 2,276 square feet. Average (mean) square footage for new single-family homes ticked up to 2,506. Since Great Recession lows (and on a one-year moving average basis), the average size of new single-family homes is now 5.6% higher, while the median size is 9.7% higher. However both measures will weaken in the coming months.