New home sales plummet 17% to 2-year low as rising mortgage rates sideline buyers
New home sales plummet 17% to 2-year low as rising mortgage rates sideline buyers
It's also pretty typical for house sales to drop in the winter because people tend to not want to move during the holiday season. The biggest time for house purchases seems to be in the summer, when kids are out of school and the weather is nicer.
New home sales plunged 17.3% to a seasonally adjusted annual rate of 610,000 units last month, the lowest level since December 2022, the Commerce Department’s Census Bureau said on Tuesday.
I think a more reasonable explanation is that the housing market was nuts from a little before Covid through probably around EOY 2022, so Dec. 2022 levels is still probably a little elevated vs "normal," whatever that means. This article seems a bit more alarmist than necessary...
This (at the end) is far more interesting to me than the rest of the article:
The median new house price increased 4.7% to $437,300 in October from a year earlier. The inventory of new homes increased to 481,000, the highest level since early 2008, from 471, 000 units in September.
That's quite a bit of inventory, so this should drive mortgage rates down over the next year, especially since the reduced fed funds rate gives a bit more room for rates to fall.
It should drive prices down too, but it's not doing that either. Markets are based on whimsy now.
Eh, I don't think so. I don't think there's an oversupply, inventory seems to also be falling. High mortgage rates discourage both buyers and sellers.
Until we stop allowing corporations to buy and control nee home sales homes will never become more affordable.
We've had years of propaganda saying that Blackrock and Zillow buying every home they can afford has no effect on the market, but it's obviously having an effect. As well as their price fixing algorithms like the one made by RealPage who is being sued by the FTC/DOJ
Just recently started looking since we want to sell our current one and buy another. We purchased 10 years ago, and after looking up and down the state, the average price increase for all houses is about 200k... so whether it's a 300k house or a 600k house 5 years ago it is now 200k more for both right now. I honestly doubt there was a 17% drop in this state.
This isn't a 17% drop in values, it's a 17% drop in sales, meaning 17% fewer homes are being sold as of last month. I think there's a good chance that's pretty consistent on both sides of the transaction, since sellers are less willing to trade their low rates for a higher rate, and buyers are less willing to have the down payment for higher rates.
We've been interested in moving to upgrade our house (want a guest bed and a bigger master bed) and to reset the capital gains exclusion (we're up around $350-400k, cap gains exclusion is $500k), but it's not worth giving up our lower rate. We'll be interested if rates drop below 5%, but with current rates around 6.5-7% (depending on term), we're not interested.
I imagine a lot of homeowners are like us. They don't need to move, so they'll put it off until mortgage rates are more attractive, or until they need to move.
At least you get to roll your equity over into the new market, rather than having to enter from scratch.
Not really, 90% of the reason we're moving is because we can no longer handle the debt accumulated and plan to use whatever gains we make to bring ourselves out of it and hope to have enough to at least put down a down payment on something else.