September Saw a 2.0% Decrease in Existing Home Sales

• Key Takeaways Existing Home Sales decreased by 2%, surpassing analyst projections of -3.5%.
• The National Association of Realtors contends that the Federal Reserve should abstain from further rate hikes.
• Market response to the report is relatively muted, with traders prioritizing geopolitical events over the data.

On October 19, the National Association of Realtors published the September Existing Home Sales report, which revealed a 2% month-over-month decrease in home sales, surpassing the expected consensus of -3.5%. Comparatively, on a year-over-year basis, existing home sales dropped by 15.4%, a trend attributed to current mortgage rates. Median home prices increased by 2.8% from the previous year, reaching $394,300.

The National Association of Realtors remarked on the persisting challenges of limited inventory and reduced housing affordability, emphasizing that the Federal Reserve ought to reconsider raising interest rates, citing softening inflation and weakening job gains as key factors.

However, despite NAR's stance, bond market traders differed, as Treasury yields reached new highs, with the 10-year Treasuries aiming to surpass 4.95% and the 30-year Treasuries settling above 5.00%.

Following the release of the Existing Home Sales report, the U.S. Dollar Index shifted from recent lows. Contrary to expectations, the rise in Treasury yields did not significantly boost the American currency.

Gold prices remained above $1950, driven by increased demand for safe-haven assets amidst geopolitical tensions in the Middle East. The impact of the report on gold markets is expected to be limited, with the focus likely to remain on external factors.

The S&P 500 settled around the 4315 level. While the report's favorable results may offer some support to stocks, the market's primary catalysts are anticipated to continue being geopolitical developments.