With soaring mortgage rates and plunging mortgage applications, it should be no surprise that new home sales crashed in December. Analysts expected a modest 0.7% decline but sales crashed 10.4% - the most since March 2015 - and at 536k SAAR, this is the lowest since Feb 2016.
First annual decline since February...
Home sales in The Midwest crashed 41% sequentially and 29% YoY.
The supply of homes for sale increased to 5.8 months, the highest since September 2015, from 5 months in November. There were 259,000 new houses on the market at the end of December, the most since 2009.
This is the first clear indication that higher rates are crushing the housing market...
And Median home price surges to $322,500, second highest in series history, just lower than the record $323,700 in September
As Bloomberg points out, the figures indicate that the increase in mortgage rates curbed momentum in the housing market after steady job gains and historically low borrowing costs helped push full-year sales to the highest since 2007. Stricter lending standards also remain a hurdle for buyers this year.