U.S. new home sales dropped by 11.3% in May, significantly more than the expected 0.2% decline. The Commerce Department's report revealed a stark contrast to April's revised increase of 2.0%. Annually, only 619,000 new homes were sold in April, falling short of the 633,000 forecast. This slump highlights ongoing challenges in the housing market, a critical sector for the U.S. economy, influencing consumer spending and overall economic health. As actual mortgage rates are by far higher as they were in recent years people can't move easily as they locked in lower rares. That puts pressure on the Fed to lower rates and make money cheaper. Or they can wait until sth. breaks... fiat clown world.
117 sats \ 1 reply \ @Undisciplined 26 Jun
That happened despite new home prices having already fallen significantly, too.
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75 sats \ 0 replies \ @TomK OP 26 Jun
I am a happy tenant
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96 sats \ 0 replies \ @Bell_curve 26 Jun
“Revised” estimate
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42 sats \ 0 replies \ @kepford 26 Jun
Been follow people in the real estate markets more closely lately and its interesting. I keep hearing the same things over and over.
- Interest rates are so much higher it is keeping people from selling that have great rates locked in
- Keeping buyers without significant cash from buying because they can't afford the payments.
- Home supply is still historically low
- Investors are buying at discounts
- If rates are reduced supply shortage will quickly drive prices up due to the pent up demand
Basically it is a weird situation. If the rates are increased or kept where they are it is going to take some time for people to be willing to sell their current homes. A lot of owners are just waiting it out hoping rates go down and prices go up. Buyers are waiting for rates to go down but do not realize that supply and demand will likely drive up prices.
The advice I have heard for buyers that makes the most sense is that go ahead and buy and just plan on refinancing in a few years when rates are cut. I think the markets are not expecting rates to stay where they are for 5 or more years.
I'm no expert but people need housing and the state needs to keep the economy moving so I don't see these rates staying where they are for more than a couple years max. It is interesting to watch.
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42 sats \ 1 reply \ @grayruby 26 Jun
I have to imagine with rates where they are it is a real challenge for first time buyers to get financing.
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30 sats \ 0 replies \ @TomK OP 26 Jun
That's why the CBs need to lower rates rapidly. To avoid a collapse of a collateralized market
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