According to a recent report from the Census Bureau and the Department of Housing and Urban Development, in September sales of new single-family homes dropped 18% from September a year ago to just 41,000, not seasonally adjusted. This is on top of a 16% increased to 331,000 new unsold single-family homes on the market from a year ago, which is the highest number since January 2009, and represents an 8-month supply, the highest since February 2011. To keep pace, the median sale price of new homes dropped 3.5% from September of last year and is down 6.8% from its highest level last November.
On top of shifts in housing, analysts have been expecting slower auto sales for a variety of reasons for more than a year. According to a CNBC survey, several auto dealerships throughout the country are reporting a drop in sales and customer traffic in the face of increasing interest rates and an increase in low-mileage, 3-year old cars coming back into the product mix. While business is still up for many dealerships, and Edmunds expects October auto sales to be close to 17 million vehicles, one dealer surveyed indicated that customers are taking longer to decide because of higher interest rates.
While shifts in housing and auto sales are not necessarily accurate predictors or lead indicators that the economy is shifting, they are indicators of consumer behavior adjustments. Despite their questionable accuracy, it is prudent to consider statistical similarities in adjustments in both sectors prior to previous economic downturns. It will likely not be different the next time around.