Auto Market Weekly Summary

Key Highlights

• Existing home sales declined 1.0% in September, marking the lowest level since 2010.
• New home sales grew more than expected, with a 4.1% monthly increase.
• Consumer sentiment rose by 0.6% in October, surprising analysts.

Housing Market Trends

The housing market displayed mixed trends in September, with existing and new home sales diverging significantly.

• Existing home sales dropped 1.0% in September, reaching the lowest level since 2010. Inventory increased by 1.5%, marking the highest level since October 2020.
• New home sales increased by 4.1% month-over-month and 6.3% year over year, with the highest activity in the Northeast and the South.
• Total home sales fell by 0.2% for the month and 2.1% year over year, hindered by high mortgage rates despite the Fed’s rate cuts.

Labor Market Dynamics

The labor market has been deteriorating this year, with claims increasing and lasting longer.

• Initial jobless claims declined by 15,000 to 227,000 for the week ending Oct. 19, yet were still higher than pre-pandemic levels.
• Continuing claims increased by 28,000 to 1.90 million as of Oct.12, the highest level in nearly three years.
• The broadest measure of continuing claims decreased by 16,000 to 1.62 million, down by 72,000 over the last four weeks.
• After disruptions from Hurricane Helene and Milton, the latest data do not indicate a continuing trend in higher initial claims. Still, continuing claims indicate that more people have remained unemployed due to the storms and the Boeing strike.

Consumer Sentiment and Inflation Expectations

Consumer sentiment showed unexpected resilience in October, buoyed by improving conditions and stabilizing inflation expectations.

• According to the index from the University of Michigan, consumer sentiment rose by 0.6% month over month and 10.5% year over year, with improvements in views of the current situation.
• The median consumer expectation for inflation in one year remained stable at 2.7%, while the five-year expectation declined to 3.0%.
• The consumer’s view of buying conditions for vehicles improved to the best level since April.
• The improvement in sentiment was mostly unexpected, as the daily index of consumer sentiment from Morning Consult has been tracking further improvement in October, extending the streak of increases to five straight monthly gains.
• The Morning Consult index was up 1.4% for the month as of Friday, Oct. 25, which left the index up 9.2% year over year.

Gas Prices

Gas prices have declined this month as of Oct. 24.

• The national average for unleaded gas fell by 1.9% from the end of September to $3.14 per gallon, according to AAA, down 11% year over year.

Jonathan Smoke

Chief Economist

Jonathan Smoke leads Cox Automotive’s economic and industry insights team, which tracks key metrics and trends impacting both the wholesale and retail markets for vehicles informed by the proprietary data from the company’s businesses and platforms. For 28 years, Smoke has focused on translating data and trends into relevant actionable insights for the industries that represent the biggest purchases that consumers make in their lifetimes: real estate and automotive. Smoke joined Cox Automotive in 2017.