The latest Auto Market Weekly Summary by Cox Automotive Inc. presents a comprehensive overview of the various trends and indicators within the market, offering valuable insights for industry professionals and consumers. The report covers the retail sector, residential construction, and existing home sales, providing a nuanced understanding of the current market conditions.
In the retail sector, there was weaker consumer spending in May, with growth at 0.3% – less than anticipated. This was coupled with a downward revision for April, which saw a decline of 0.2%. While motor vehicles and parts categories outperformed the rest, five of twelve major categories overall saw sales decline. Notably, the auto sector saw an increase in sales at 0.8%, following a 0.4% decline in April. However, the sector experienced a mixed performance, with certain categories such as sporting goods, hobby, book, and music stores seeing gains, while others like gas stations and building material and garden equipment and supplies dealers faced notable declines.
Residential construction trends for May reflected a decline in the seasonally adjusted annualized rate of starts at 5.5%. Permits also saw a decline of 3.8%, with both single-family and multifamily starts experiencing decreases. Year over year, total starts were down 19.3%, with single-family starts down 1.7% and multifamily starts down 50%. This trend is attributed to higher mortgage rates impacting expectations for a housing recovery, resulting in declining permits for three consecutive months and a decrease in single-family permits for four straight months.
In May, existing home sales saw a decline of 0.5%, marking the third consecutive month of declines. Year over year, existing home sales were down 2.8%, with the South region experiencing the most significant decrease. Inventory showed an increase of 6.7% year over year, while the median sales price rose to £419,300, up 5.8% year over year. These declines are primarily attributed to the impact of higher mortgage rates, with rates averaging 7.35% in May, considerably higher than the abnormally low rate of 3.09% in 2021. The market is further impacted by rising property taxes and insurance rates, posing challenges for existing homeowners in finding economically viable alternatives.
The report is enriched by the insights of Jonathan Smoke, who leads Cox Automotive’s economic and industry insights team. With 28 years of experience in translating data and trends into actionable insights for real estate and automotive industries, Smoke provides valuable perspectives on the current market conditions. His observations on the impact of mortgage rates, home prices, and consumer expectations offer a comprehensive understanding of the complexities at play within the market.
In conclusion, the Auto Market Weekly Summary presents a thorough analysis of the trends and challenges within the retail sector, residential construction, and existing home sales. The insights shared by Jonathan Smoke add depth to the analysis, offering valuable considerations for industry professionals and consumers alike. As the market continues to evolve, these insights serve as essential tools for navigating the complexities of the auto market.