Despite existing home sales unexpected surge in January, new home sales are expected to drop modestly (-1.2% MoM) in January (after a huge unexpected surge in December), but sales actually tumbled considerably more (down 4.5% MoM) to 801k SAAR (from 839k SAAR).
However, on a year-over-year basis, new home sales are still notably lower.
Was the surge in December just demand pulled forward as mortgage rates started to accelerate?
Median home prices in January were just shy of all time high at $423,300 (+13.4% YoY)… (and average new home price – $496,900 – did indeed hit a new all-time high)
Bloomberg reports that while underlying demand for new homes remains solid, fueled in part by record low inventory in the resale market, the highest mortgage rates since mid-2019 represent a headwind. Higher materials costs are also contributing to housing inflation and sidelining many prospective buyers.
Homebuilder confidence is ebbing a little, but remains nothing relative to the collapse in ‘real’ homebuyer confidence (as opposed to yield-seeking investment buyers)…
Will Powell’s rate-hikes make that situation any better?
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