US Existing home sales sales yet to see a boost from rates-110398800

North America Economic Research19 September 2024J P M O R G A Nwww.jpmorganmarkets.comEconomic and Policy ResearchAbiel Reinhart(1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NA•Existing home sales fall 2.5%m/m to 3.86mn pace, retouching cycle lows•Pending home sales data next week will provide a more updated view on how lower mortgage rates are impacting sales•Pending sales from some sources still look soft, though weekly mortgage applications are rising from low levelsExisting home sales fell 2.5%m/m to a 3.86mn pace in August, essentially retouching the cycle low of 3.85mn from October. The decline in existing home sales, which measure closings, was telegraphed in advance by weaker pending home sales. Next week we will get the NAR’s August update on pending sales, although measures from Redfin and Zillow still look weak for that month. On a more positive note, weekly mortgage applications have improved in each of the last four weeks, though their absolute level is still low. Sales should soon find some support from the decline in mortgage rates, which are down about 75bps in the last three months. It is also possible that the well-publicized possibility of a Fed cut led some buyers to delay purchases in the hope that rates would fall further, and some buyers might have wanted to wait until new rules for real estate agents that were part of the NAR settlement went into effect in mid August.Inventories continue to increase even as they remain well below pre-COVID levels. Available homes for sale rose 23%oya in August while being down 26% from the same month in 2019. With sales so low the months’ supply has re-normalized to pre-pandemic norms, increasing to 4.2 in August from 3.3 a year earlier. Meanwhile the rate of price appreciation has slowed moderately, with median transactions prices up 3.1%oya in August vs 5.6%oya in February. 60801001201403.54.04.55.05.56.06.57.02019202020212022202320242025Mn, saarExisting and pending home salesIndex, saSource: NAR, J.P. MorganExisting homesalesPending home sales (advanced one month)See page 5 for analyst certification and important disclosures.US: Existing home sales sales yet to see a boost from rates2Abiel Reinhart (1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NANorth America Economic ResearchUS: Existing home sales sales yet to see a boost from rates19 September 2024J P M O R G A N1001502002503003503.54.04.55.05.56.06.57.02019202020212022202320242025Mn, saarExisting home sales vs. mortgage purchase applicationsIndex, saSource: NAR, MBA, J.P. MorganMortgage purchase applications (monthly avg)Existing home sales-60-40-200204060802019202020212022202320242025%oya in nsa data, monthlyNAR and Zillow pending home salesSource: NAR, Zillow, J.P. MorganNARZillow3456782022202320242025Percent, weekly30-year fixed rate mortgage rateSource: Freddie Mac, J.P. Morgan3Abiel Reinhart (1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NANorth America Economic Research19 Sept