Fewer People Are Planning to Buy Homes

This article in today's New York Times is full of bad news for housing. Among other things:

• S&P/Case-Shiller released its home price indices for September. The 20-market national index is down by 17% from last September's level, and is down by 22% from its peak (which occurred in July, 2006). The California markets fared even worse. From September of 2007 to September of 2008, San Francisco, Los Angeles, and San Diego fell by 30%, 28%, and 26%, respectively. Each of the three markets is now about one third lower than it was at its peak. Considering recent activity in the housing and financial markets, the October and November index values will likely come in even lower than September's.

• According to the latest Conference Board consumer survey, just 1.9% of households are planning to buy a home in the next six months. There are roughly 117 million households in the US, so if we annualize the Conference Board's estimate, that works out to about 4.4 million home purchases in the next year. To put that in perspective, the National Association of Realtors reported yesterday that the seasonally adjusted annual rate of home sales was approximately 5.0 million for the month of October. (That's for existing homes only; the rate would be somewhat higher if we included new homes as well.) In other words, if the Conference Board survey is to be believed, the rate of home sales is likely to fall substantially from its already depressed level.