After three straight months of huge resurgence (<a href="https://www.zerohedge.com/personal-finance/us-new-home-sales-unexpectedly-explode-higher-may">with last month's massive spike</a>), new home sales were expected to slow down in June and they did. New home sales dropped 2.5% MoM (the first drop since Feb), a miss from the 5% expected, but only because last month's 12.2% surge in sales was revised down to a 6.6% rise...

New home sales are still up almost 24% YoY but the total new home sales SAAR plunged in June - is this the start of the catch-down to existing home-sales slump?

Median new home price fell 4.0% y/y to $415,400; average selling price at $494,700.

Other data - from the US Census Bureau - shows the first half of 2023 has seen the largest decline in US home prices on record...

Finally, we ask, if homebuilders are so bullish on this recovery in new home sales, why aren't they grabbing permits to build with both hands?

Have they reached the limits of incentivization?

With mortgage rates back at cycle highs - well above 7.00% - the cost of 'vendor-financing' new home sales will eat into margins sooner rather than later.

...and recent surges revised dramatically lower.
{ai:summary}New home sales rates have dropped 2.5% MoM in June, after a surge in sales last month. There is concern that this decline may be the start of a catch-down to the existing home-sales slump. Median new home prices have also fallen by 4.0% y/y. It is questioned why homebuilders, despite being optimistic about the recovery in new home sales, are not taking advantage of building permits. One reason for their hesitance may be the high mortgage rates, which will impact profit margins. #economy

US New Home Sales Tumble In June, Prices Tumble

Loading...