New Home Sales Hammered In October
With existing home sales collapsing to their lowest SAAR since 2010, new home sales are the only pillar left holding up any hope in the US housing market. However, with housing affordability at its lowest since at least the early 1980s, it's no surprise that analysts expected new home sales in October to tumble 5.0% MoM
The Mortgage Bankers Association's index of home-purchase applications tumbled to 120 - the lowest level since 1995 - as mortgage rates hit 8% for the first time in 23 years in October.
So, it should be no surprise that new home sales were even worse than expected, plunging 5.6% MoM (and making it even worse, the 12.3% MoM jump in Sept was revised down to +8.6%)...
The trend of downward revisions continues...
It appears the homebuilders finally hit their wall eating the gap between these two lines was just not sustainable...
Homebuilders can't be filling this gap either - between the current 30Y mortgage rate and the effective rates that borrowers are currently paying on their home loans forever...
The median new home price fell 17.6% y/y to $409,300; average selling price at $487,000
That is the lowest median price since Aug 2021, catching back down to existing home prices...
Is Powell winning his war on affordability? Or crushing the middle class's main source of wealth?
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