The National Association of Realtors (NAR) reported today that sales of existing homes (resales) were up slightly in September 2017 on a monthly basis. At a seasonally-adjusted annual rate of 5.39 million last month, that was practically unchanged from the 5.35 million estimate for August that was the lowest in a year.

On an annual basis, resales in September were 1.5% less than those in September 2016. It was the first contraction for existing home sales since July 2016.

There may be some storm effects to consider in these figures, but for yet another economic account softness, weakness, or however you wish to classify the trend started long before Harvey and Irma were superheated winds blowing across the Sahara. Perhaps some house closings were delayed in process by them, but the lack of significant rebound in September suggests underlying fundamentals rather than anything else.

Those fundamentals continue to be reluctance as a macro rather than financial or other matter. The level of estimated inventory of homes available for sale continues to shrink. The change in inventory, a proxy, really, of labor market confidence, dates back to right when you would expect – the middle of 2015 and the appearance of a serious slowdown that has yet to be reported in the mainstream (thus, it can’t be manipulated emotion as some economists like to claim).

As noted a few days ago in identifying the same sort of softness in especially apartment construction (as well as the timing), these inflections follow almost perfectly the deceleration in the labor market. Again, the real estate equation is pretty simple; fewer new jobs, fewer new households (demand for new housing units) as well as fewer homeowners willing to risk making a jump.

The breakdown of the monthly resale volume leaves no doubt as to what is taking place in the market. The volume of sales at the lower ends is down; in the lowest tier by nearly 20% year-over-year. The $100k to $250k segment, which saw sales decline by nearly 6% in September 2017 from September 2016, accounted for 43% of all resales. Together with the bottom tier, the two form a small majority of all activity.