Posted on 06/28/2023 8:13:19 AM PDT by millenial4freedom
(RTTNews) - The Commerce Department released a report on Tuesday unexpectedly showing a sharp increase in new home sales in the U.S. in the month of May.
The report said new home sales soared 12.2 percent to an annual rate of 763,000 in May after surging 3.5 percent to a revised rate of 680,000 in April.
Economists had expected new home sales to slump 1.2 percent to an annual rate of 675,000 from the 683,000 originally reported for the previous month.
With the unexpected spike, new home sales reached their highest level since hitting a rate of 773,000 in February 2022.
"A tight supply of existing homes, builder incentives, and resilient demand have been supporting new home sales, despite relatively high mortgage rates," said Nancy Vanden Houten, US Economist at Oxford Economics.
(Excerpt) Read more at nasdaq.com ...
Is that data based on nominal or inflation adjusted figures? If its nominal, with the inflation we’ve had, its highly misleading and not good at all. If its inflation adjusted, then this really is a surprise on the up side and shows some real demand.
WHO is buying all these houses? It does not say 1sr time buyers or private buyers. I suspect more land grabbing.
Wait, thought we were just told home sales were down which would end the country.
My opinion is that this is a fluke spike in sales in May from people trying to close sales and lock in lower interest rates that were in effect back then.
I would guess that sales for June will be sharply down as a result of increased mortgage rates.
But then as my wife likes to continuously remind me, I could be wrong.
In my OPINION .... the fed has been too slow , they have not gotten ahead of inflation, but have pushed it along ...
their ability to “talk” the economy is gone, by the time the reaction comes ... it will come hard.
The longer they dawdle the worse it will be.
Fed rate should be 10% by now ....
There could be a lot reasons for this. One is the increased rent that happening everywhere. It is pushing people to buy. There is no inventory of houses to choose from and prices have gone up so high. That people would rather buy a tiny new house than a beat up older house for more than it is worth.
Then there are also the people, who moved during the pandemic and worked from home until they could find a local job, are getting settled in their new state.
It’s units, not dollars, so there is no “inflation adjustment” applicable.
Now, what is not reported is median unit price.
Another thing that may be going on is flight to real estate from equity or bond or cash, as an inflation hedge.
Yeah, saw that after posting. I had just read another article on total sales volume and thought this repeated the same. Just goes to show me that I need to read before posting. In that regard, I do wonder if this total sales volume spike is overly influenced by regional factors. For example, is most of the country down but the southeast and south so booming that it skews the total number up?
Most of the times it’s people completing sales because school ends the next month and they need the summer to move.
Is a re-fi counted as a sale?
How are those giant soviet style ghettos classified? They seem to be popping up all round me with several hundred units. At the low price of 250K for 1000sqft they are the economical option, and fill quickly, but wouldn’t exactly classify it as a flourishing housing boom.
“I suspect more land grabbing.”
Call house buying or land grabbing, it is a transaction with a buyer and a seller.
It is all the same.
I’m not defending Biden/The Fed, but with soaring new home sales and builders ramping up housing starts, can we actually achieve a ‘soft landing’ without a recession, or does inflation reaccelerate?
**************
It’ll be short lived.
The central bankers will give the cheap money advocates a couple of “kicks to the balls” as we head into 2024.(rate hikes)
This is another reason why gen x, y, z, are competing against such buyers, and find it difficult to locate homes at a affordable price.
This is what happens when you illegally import 14 million more asses into the country. People have to live somewhere so some will choke down the higher interest rates.
We just sold our house...top dollar cause of practically no inventory. We’re building our dream house. I suspect many did the same but the window is closing fast.
It’s an interesting question. The answer might lie in what caused the suddenness of this jump.
There are three times in American history that ANNUAL sales were above 750,000:
1977-1978, followed by an enormous housing crash.
The Great Bubble of 1996-2007
The Coronavirus Living Arrangement Shuffle and Great Recession bounce-back of 2020-2021.
So I expect this is more of a blip, a bounce-back from a year-long slump (March, 2022- April, 2023), when new home sales bounced around the housing-slump levels of annual rates of 600,000 homes sold that we say in 1980-1982, 1990-1991 and 2008-2018.
There goes the recession predictions.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.