With mortgage rates soaring, it is only a matter of time before US housing is adversely impacted. And while the just released October new home sales data focused on sales of houses based on contracts signed in the month before the election, some concerns were already evident, when the number of new homes sold tumbled to 563K from a pre-revised 593K, badly missing expectations of a 593K print.
This was the weakest new home sales print going back to the 558K new homes sold in the month of June.
Furthermore, and as has traditionally happened with this volatile series, the the previous 3 months of data were all revised uniformly lower, with the September surge to 593K, now reduced to a more modest 574K.
The silver lining is that the drop in sales lifted the supply of homes available for sale to 5.2 months at the current selling rate, matching the highest since March.
An interesting observation in the latest data is that despite the recent increase (and surge, most recently) in mortgage rates, the median sales price was mostly unchanged, declining from $314K to $305K, the second highest since the summer and suggesting that future homes prices are set to drop, in a move inversely proportional to the recent surge in mortgage rates.