October sucked, ignore the price changes

From CNN:

US home sales fall for 9th month in a row in October

Home sales in the United States declined for the ninth month in a row in October as surging mortgage rates and high prices pushed buyers out of the market.

Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — were down 28.4% in October from a year ago and down 5.9% from September, according to a National Association of Realtors report released Friday. All regions of the United States saw month-over-month and year-over-year declines.

That continues a slowing trend that began in February and marks the longest streak of declining sales on record, going back to 1999.

Sales in October were at their weakest level since May 2020, when the real estate market was at a standstill during the pandemic lockdowns. Beyond that, sales last month were the weakest they have been since December 2011.

Still, home prices continued to climb last month. The median home price was $379,100 in October, up 6.6% from one year ago, according to the report. But that’s down from the record high of $413,800 in June. The price increase marks more than a decade of year-over-year monthly gains.

This entry was posted in Economics, Housing Bubble, National Real Estate. Bookmark the permalink.

28 Responses to October sucked, ignore the price changes

  1. leftwing says:


  2. Chicago says:

    Left: Big Red continue to beat up the dog meat teams. Have zero quality wins. In fairness this weekend were the first two home games, but it already seems as if the Crimson and Q’Pac are lapping them. The real litmus test was Clarkson, but they beat the shit out of them. This week is the CT bros. with UConn and SHU. Based on to date, I assume a quaint disemboweling is in store.

    December 2nd at Lynah is going to be a wake.

  3. leftwing says:

    Yeah, agree…Harvard had a nice recruiting season a couple years back, bearing fruit now…Government and ECAC shutdowns really fucked the Red…Harvard’s depth will be tested this weekend in Ann Arbor, assuming Michigan has its team back…was pretty decimated by an adenovirus with not enough players to dress against MN and a senior in the ICU…with the hockey and especially football games this upcoming weekend I hope that University is isolating those players somewhere off campus lol.


  4. BRT says:

    I’m going with a small short position on TSLA, for years, I wouldn’t because you can’t short a cult, but the cult is now confused after he bought twitter and a large percentage of them have been given the doctrine that Elon Musk is the new devil incarnate. If I can pay for Christmas with it, I’ll be happy.

  5. 3b says:

    Stifel economists say Feds Bullard May be “ undershooting “, and the real number the Fed needs to get to is 8 or 9 percent. Got to get these crack addict like artificial low interest rate people off their addiction.

  6. leftwing says:

    Alright BRT, going to make your, 3b’s, and possibly lib’s heads explode…

    A ground rule, no pulled from the ass freestanding predictions on the Dec hike…forecast with backup, such backup to include the CPI which is released the day prior to the meeting.

    For reference, FFR futures are indicating a rate of 4.14% post December meeting (14 to 39 bps) and are probability weighted for a 50 bps (76%) and 75 bps (24%) hike.

    Here I go…if CPI/CPI core are both below +0.3 MoM then 50bps is a lock. If both are 0.3-0.6 then 75bps and 50bps are in play…you get both down to 0.1 or below then it’s 50/25 in play, favoring 50bps…

    I’m of the school we are beyond peak inflation and we will see the MoM at +0.4 or below. Expect hawkish words nonetheless.

    We hit 25bps and we’ll have a rip your face off rally, like nearly +10% over a few days on NDX (which is part of the reason I don’t think they’ll go 25bps).

    Importantly, I am not flummoxed at all by the current hawkish noise from governors…I actually see that as consistent with a 50bp raise with 25 on the table, ie. they know they are leaning dovish but don’t want unbridled enthusiasm to counteract their actions so they are using the podium to keep the lid on…

    So…my forecast…CPI/core month-over-month +0.4 or below followed by 50bps at the Dec meeting and hawkish “don’t get your hopes up” language. Small chance of MoM measures at or below +0.1 in which case you have 25bps in play (25% chance).

    Let ’em fly!

  7. 3b says:

    Left: Your analysis is solid , and I would agree with it, but I am lousy from the messaging aspect. The Fed needs to restore their credibility, as even with their current tightening over the year, the market has been telling the Fed feck off, you are not serious. Every so called positive news on inflation was followed by euphoria in the stock market, and a drop in rates. Just look at the overdone reaction to the last CPI report, which many acknowledge was way overdone. And it leads as we have seen over the last months to the nonsense of the Fed s going to pivot, and or the Feds going to pause, or they are going to pause and pivot, or whatever other silly chatter was out there. Remember, I was the one who said the Feds comments after Jackson Hole in August was a game changer and it was; many dismissed it as Fed posturing. So, if the Fed wants to continue to reinforce their message that their serious , then do the 50 or 75. I don’t think they can do the tough talk and then do something less. If they do any credibility they might have gotten back is gone, and then it’s back to the races for the markets. If they want to really send the message, do 75 bp in Dec, if for no other reason them to show the market again they are serious. Going forward into 2023, thru can do 50 or 25bp as the year progresses. As o have been saying, the Fed needs to firmly reestablish their credibility with the markets, and demonstrated they are not a paper tiger and their recklessness of the last decade plus is over. We have to get back to real market rates , and asset values based on fundamentals, not zero rate crack money, and to a healthy fear/ respect of the Fed . If they want to reinforce the message, they do the 75 in December. We shall see.

  8. Boomer Remover says:

    I am in agreement with 3b for the reasons as stated. Let’s see what December 3b!

    Just feels like we are going to be back at ATH’s within months if we let up QT. The trajectory is almost parabolic on a longer timeline.

  9. Fast Eddie says:

    I would love to a 75 basis point hike in December and a strong message from the FED that the train will keep rolling for the foreseeable future but I have the feeling Powell and company will tremble like a soaking wet chihuahua caught in a gale. The pretenders need to be taught a lesson.

  10. 3b says:

    Fast: We shall see, but in typical Fed fashion, of appearing to contradict themselves or not being on point, the Feds Bostic on Saturday said he is inclined to move away from a 75 bp increase in December, and believes the Fed need only increase rates another point to get to their inflation target. Of course, the markets may run with that, and perhaps the Fed feels that by publicizing different view points, they will keep the market guessing which way they go, perhaps some validity in that, but I disagree with it. I think the Fed should know by now that comments like Bostics the market will run with, thus making the Feds job harder. I believe the Feds public message should be on point, a unified message, agree on on one clear message and go with it, let their debates be internal and then the minutes published after the announcement.

    Oh, and I apologized for all the typos in my original post; tired eyes.

  11. leftwing says:

    Good point on the credibility 3b…running it through my framework supports where I am above.

    A couple of your comments for you to consider further…

    Regarding 75bps for ‘credibility’…the Fed’s credibility issue derives from obstinately ignoring the obvious data. I would suggest that reclaiming that credibility has more to do with reacting properly to current data than raising to send a ‘message’ or to ‘undo’ their prior error…a raise heavier than data suggest would just compound their credibility issue, ie, for the second time this cycle they would be ignoring the obvious data. More simply stated, even in your evaluation there is a Nov CPI at which the Fed should not do 75bps…

    Regarding a unified message, it is only a very recent phenomenon that all governors are singing off the same hymn sheet. Historically there has always been dissension. ‘Unity’ is the outlier, not the norm.

    Background, my view is shaded not just by where I think CPI will land but I’m expecting a weak 4Q and holiday season. By their mid-Dec meeting date they’ll have a first look at that data.

    I’m thinking they need an appreciable increase in month-over-month CPI to 0.6% or better to pull yet another 75bps. Big picture, we’re deeply in uncharted territory now…4x 75bps in a row is unheard of….we’ll see.

  12. Fast Eddie says:

    4x 75bps in a row is unheard of…

    So was a 0% rate throughout the entire Obammy administration. But, to everyone’s point, we shall see.

  13. Fast Eddie says:

    I mean, if pictures tell a story, take a look and draw your conclusion:


  14. Juice Box says:

    leftwing – re”4x 75bps in a row is unheard of…”

    How so…Volker gets allot of media/creidt but Arthur Burns really cranked it up.

    1973 Fed Funds Rate

    Jan. 19 6.0% Stagflation
    Feb. 23 6.5% No notable event
    March 20 7.0% No notable event
    April 17 7.25% Inflation at 5.1%
    May 15 7.5% Inflation at 5.5%
    June 19 8.5% Inflation at 6.0%
    July 17 10.25% Recession
    Aug. 21 11.0% OPEC embargo worsened inflation in October

    1973 Fed Funds Rate

    Feb. 20 9.0% Recession
    March 19 10.0% Embargo ended in March
    April 16 11.0% Fed raised rates to stop inflation
    July 16 13.0% Inflation at 11.5%; Ford replaced Nixon in August
    Nov. 19 9.25% Recession combined with 12.2% YoY inflation
    Dec. 17 8.0% The Fed lowered rates to end recession

    Point it Fed might be too dovish. Big increases will kill inflation.

    But the reality is that is NOT what they want….

  15. Juice Box says:

    typo send part was 1974

  16. leftwing says:

    “4x 75bps in a row is unheard of…So was a 0% rate throughout the entire Obammy administration.”

    Again, you’re supporting my point…two equal and opposite actions with a 0.4% MoM CPI means start to normalize…if 50bps on top of 4 by 75 can be called that…

    Or post your own analysis…at what month-over-month CPI do you think Fed breaks for 75bps, 60bps, and 25bps…positions without analytical backup are just tosses of a coin.

    An interest rate chart showing me what every business major knows to be true is not useful.

  17. leftwing says:

    “How so…Volker gets allot of media/creidt but Arthur Burns really cranked it up.”

    And prior to 1973/74 (50 years ago) how many times has it happened? So, what are we, a once in century event?

    “Point it Fed might be too dovish. Big increases will kill inflation.”

    Again, select historical data demonstrate nothing regarding forward actions without contextual analysis. C’mon JB, you’re better than that…Christ that last sentence is embarrassing…

    So, same point to you as to Gary…

    Yes there was a 40 year bull in bonds and ZIRP, yes large rate increases kill inflation…now, since we’ve dispensed with HS Macroeconomics care to share your framework for the Dec decision and support it with at least Nov CPI and 4Q economic assumptions and analysis?

  18. Juice Box says:

    As we all should know the costs are push driven, but it’s global and we as the reserve currency with the largest economy are usually last to feel the effects. But lets not look here but the outer rungs in our galaxy first… . Europe is now somewhere around 11% inflation and are planning for public spending cuts and tax increases so jaw bones the media. I suspect the oil producers are going to squeeze again to fill their coffers more, and Europe will feel it first due to their reliance on diesel. 15% is what some writers are saying of inflation in Europe in the last 6 months there.

    But hey we are worried about our costs right? How can they go down if we swallowed the NOW PERMANENT increases in fuel like Diesel……There is little the FED can do to curb inflation if fuel prices increase further. Diesel and costs have little correlation to the cost of a used home loan in a years time.

  19. leftwing says:

    Not sure where you’re going with the above but I will agree with one point I think I’m reading…that the increases we’ve seen so far are likely permanent across many goods…I’ve said here before, don’t expect your $1.39 quart Gatorade bottle from 2020 that is now 28 oz and $1.89 to be a quart and cheaper, ever again…

    Many nominal costs won’t go down…what we are discussing though is the rate of change up, when does that get arrested…

  20. Juice Box says:

    Left -“So, what are we, a once in century event”

    Rabbit hole I like to avoid..So here we are NOW the consequences of ZIRP or perhaps bad monetary policy since Nixon.

    Look I already know what’s going to happen. Congress has no compunction, regardless of the two groups in power. Expect them to spend money we don’t have.

  21. Juice Box says:

    It will be an interesting January too, out of the gate expect dozens of bills to be introduced none of which have any chance of passing into law. The republicans like crypto have no future, but as predictable that they are they will cling to the very end.

  22. BRT says:

    If the US is an addict to a drug (ZIRP, Deficits, Debt Monetization), it is at a point in the addicts life where they are about to hit rock bottom. There’s no easy solution here anymore.

  23. leftwing says:

    “Rabbit hole I like to avoid..So here we are NOW…”

    LOL, exactly my point….everyone is like a Saints fan whenever playoffs are brought up…yes, the call was horrible, it should have never have happened, it altered the ‘natural’ outcome, yada, yada…but it’s done and over and in the past…

    That’s why I’m asking anyone interested on their supported opinion on what WILL happen…that ZIRP existed last decade or the Fed jacked rates in 1973 are entirely irrelevant, unless tied to TODAY….

  24. Juice Box says:

    BTW left – re: my FED comment…and what will happen…

    Reality is STILL not what they say…Their plans go out further then any month or quarter. Heck they are the best planners in the Galaxy. Unlimited budget and really some very young and bright people. Machine learning around uncertainty. It’s not a smoke filled room, they have plans to corner all markets if there is an undesirable outcome. They can and will move markets….

    You know this and so do I. What they say now is not the desired outcome..It would all come crashing down if they said they would print until the cows don’t have to come home.

    Let’s get to the point anyway of moving markets. Japan’s central bank and our government with the takeover of Fannie and Freddie has already done it and purchased the assets for literally forever….We are bound to repeat these actions if called for. Is there a crash imminent? Not in my tea leaves..

  25. 3b says:

    Left; I agree with what you note, regarding current information and that’s how the Fed should proceed in its decision making, but again I note the market euphoria, and the whole the Fed will now pivot pause or both nonsense.

    I also acknowledge there has always been dissent on the part of Fed officials , but I don’t recall it this constant/ prevalent back in the day. It’s like everyday now there are comments from Fed officials, sure dissent, but spread the comments out. Here were have comments back to back, from the Fed may need to go higher, ( Bullard), 75 bp is still on the table for Dec (Collins), and finally I am inclined to move away from 75 bp , and only a point more to go, (Bostic) So, two comments that are hawkish, and one dovish. In this current t environment from what we have seen the last few months the market will focus on the dovish and proceed accordingly. As for the CPI numbers, not convinced yet, and we still have the winter and heating costs etc.

  26. leftwing says:

    “…but again I note the market euphoria, and the whole the Fed will now pivot pause or both nonsense.”

    Noise. What I’m trying to do is look through the noise to the conclusion…by far, long term and short term my best returns are when I can do so…

    I guess maybe the fact that some of the smart people on here reply noting the noise and pointedly avoiding the analytics may be a signpost itself that I need to pay attention to….

  27. 3b says:

    Left: Fair points. We shall see going forward. One thing for sure, the Feds recklessness this past decade plus did a lot of damage.

  28. BRT says:

    After that last move on the inflation print, I think my strategy is to just trade in and out and close out any speculative positions going into those announcements.

Comments are closed.