New Home Sales Below Trend But Still Outperforming Existing Homes

The Census Bureau released the monthly New Home Sales report today, showing a decrease from 719k in September (revised down from 759k initially reported) to 679k in October. While this number is below the long term trend that emerged after the Great Financial Crisis, it's still in league with the pre-covid highs. The post-covid story for the housing market has been one of ever-dwindling inventory and its various effects. One of the most obvious effects of lower EXISTING home inventory is that NEW homes have captured a larger share of the market. Existing homes have moved lower, almost exclusively from the peak. The divergence from New Home Sales has been especially notable since mid-2022 when rates really began skyrocketing. The following chart shows the percent change in both new and existing sales from the peak. Perhaps most notable is the price trend during the time when sales were down more than 40%. An inventory crunch is the only thing that could explain the juxtaposition of a sharp decline in sales and a sharp increase in values, but it's important to note the 3rd ingredient in play during the highlighted time frame above: incredibly low rates. Prices stopped accelerating almost as soon as rates began to jump. What's the takeaway for the housing market? Today's report doesn't tell us much. Anything in the 650-750k range is fairly neutral. Additionally, the outlook may be rapidly changing to whatever extent the highest interest rates are behind us. That's a possibility that will receive more clarity with next week's economic data, but it will take several months to confirm.

November 27, 2023 Download our Mobile App: Download our Mobile App: Housing News New Home Sales Below Trend But Still Outperforming Existing Homes The Census Bureau released the monthly New Home Sales report today, showing a decrease from 719k in September (revised down from 759k initially reported) to 679k in October. While this number is below the long term trend that emerged after the ... (read more) Mortgage Rate Watch Mortgage Rates Undo Any Potential Damage From Last Friday Thanksgiving week is always an interesting (and frequently frustrating) time for the bond market that underlies day to day interest rate changes. Markets are traded by humans, even in cases where humans are programing machines to do the trading... (read more) MBS Commentary Back Near Best Levels After Solid Auction Results Back Near Best Levels After Solid Auction Results For those who'd been watching bond markets on Friday's half day, it was perhaps slightly disconcerting to see a week's worth of gains quickly erased. An... (read more) Rob Chrisman SVP Production, Accounting, AE, Appraisal Jobs; Credit, Broker, LOS Products; Disaster Updates The mortgage industry does not move in unison, unlike some groups. (You’ll need sound.) But consistency is important. For example, Starbucks fans can be pretty much assured that the water that goes into the coffee, regardless of location around the w... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.32% +0.00% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.32% 0.00 0.00 15 Yr. Fixed 6.70% 0.00 0.00 30 Yr. FHA 6.64% -0.01 0.00 30 Yr. Jumbo 7.72% +0.01 0.00 5/1 ARM 6.86% +0.01 0.00 30 Yr. VA 6.65% 0.00 0.00 Updates Daily - Last Update: 11/27 15 Yr. Fixed Rate 6.70% +0.00% Rate Change Points Freddie Mac 30 Yr. Fixed 7.29% -0.15 0.00 15 Yr. Fixed 6.67% -0.09 0.00 Updates Weekly - Last Update: 11/22 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.61% -0.25 0.69 15 Yr. Fixed 6.98% -0.16 0.88 30 Yr. Jumbo 7.58% -0.22 0.65 Updates Weekly - Last Update: 11/8 MBS / Treasuries UMBS 30YR 6.0 99.97 +0.34 Price / Yield Change MBS UMBS 6.0 99.97 +0.34 UMBS 6.5 101.30 +0.20 GNMA 6.0 100.39 +0.28 GNMA 6.5 101.33 +0.13 Pricing as of: 11/27 5:31PM EST 10 Year US Treasury 4.3870 -0.0850 Price / Yield Change US Treasury 2 YR Treasury 4.884 -0.071 5 YR Treasury 4.409 -0.083 7 YR Treasury 4.430 -0.084 10 YR Treasury 4.387 -0.085 30 YR Treasury 4.536 -0.067 Pricing as of: 11/27 5:31PM EST Latest Video Mortgage rates will settle around five and a half to six percent, says Mood... LendingTree CEO: Buying homes remains tough for people right now New home sales were weaker than expected in October The Fed is done raising rates, says Wilmington Trust's Tony Roth Around the Web CNBC The homeowner basics of financing solar power for residential real estate CNBC The biggest Fed-triggered bond market moves are still coming, says nation's largest local pension fund Calculated Risk Blog New Home Sales decrease to 679,000 Annual Rate in October Eye on Housing Multifamily Built-for-Rent Remains Elevated Calculated Risk Blog Housing November 27th Weekly Update: Inventory Down Week-over-week, Up Slightly Year-over-year CNBC Treasury yields little changed as investors assess state of economy CNBC Now that federal student loan payments have resumed, here's what to consider before refinancing Calculated Risk Blog Lawler on Existing Home Sales, Population Projections and Household Slowdown CNBC Treasury yields nudge higher after Thanksgiving holiday Eye on Housing Home Size Trending Lower Calculated Risk Blog Black Knight: Mortgage Delinquency Rate Decreased in October CNBC European Central Bank VP says escalation in geopolitical risk could spark market correction CNBC European markets head for mixed open after hitting nine-week high

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