Alarm! New home sales dropped like Biden’s popularity in November, down -12.2% from October.
Of course, investors don’t care about actual fundamentals, rates are down so ‘buy buy buy’ the builders…
Source: Bloomberg
Trouble is, even as mortgage rates have plunged recently, applications for home purchases has continued to decline…
Source: Bloomberg
And while mortgage rates have declined (rapidly), they remain massively high relative to the effective mortgage rate for all Americans. That difference is the ‘subsidy‘ that homebuilders have to fill to enable buyers – and it’s still yuuuge!
Source: Bloomberg
So, just how many new homes were sold in November?
The last few months have been very choppy for new home sales but November clarified that homebuilders just hit a wall on their subsidization!
New home sales crashed 12.2% MoM – the biggest MoM drop since April 2022. That dragged the YoY change to just 1.4%…
Source: Bloomberg
9 of the last 10 months have seen downward revisions to the new home sales SAAR!
Source: Bloomberg
New home sales fell in the South by the most, followed by the West. The Northeast and Midwest saw increased sales…
Source: Bloomberg
The new home sales SAAR printed 590k (well below the 690k exp) – the lowest since Nov 2022… catching down to existing home sales reality…
Source: Bloomberg
And another catch-up to reality for sales, even as rates tumble…
Source: Bloomberg
Finally, we note that the median new home priced jumped to $434.7k from $414.9k…
Source: Bloomberg
The median existing home price dropped to lowest since April while median new home price jumped to highest since August
Odd that these ‘actual’ new home sales are plunging as ‘soft survey’ data shows homebuilder sentiment rising, and housing starts.