New Home Sales Unexpectedly Jump In October, Prices Surged To Record Highs

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by Tyler Durden
Wednesday, Nov 23, 2022 - 03:18 PM

After existing home sales tumbled, new home sales were expected to follow suit amid soaring borrowing costs and ever-higher prices (despite building inventories and incentives by homebuilders). They didn't...

The magical numbers from NAR showed new home sales rose 7.5% MoM (massively different from the 5.5% decline expected) which leaves new home sales down 5.8% YoY...

Source: Bloomberg

The total new home sales SAAR is hovering around the COVID lockdown lows...

Source: Bloomberg

Analysts suggest massive incentive programs drove this surprise jump in sales but median new home prices shot up to a record $493,000!!

Sales in the South rebounded after a sharp retreat a month earlier when Hurricane Ian slammed into Florida and parts of Georgia and South Carolina. The October pace in the South was still slower than in August.

There were 470,000 new homes for sale as of the end of last month, though the overwhelming majority remain under construction or not yet started. The number of for-sale dwellings under construction, however, was the smallest in six months. At the current sales pace, it would take 8.9 months to exhaust the supply of new homes.

Earlier this month, Michael Murray, co-chief operating officer at D.R. Horton Inc., one of the largest US homebuilders, said the company closed fewer homes than expected in the latest quarter due to slower sales, more cancellations and continued construction delays.

Finally, given the total collapse in homebuilder confidence (about future sales), which still has a long way to go to catch down to the collapse in homebuyer confidence, we would suggest real estate agents 'brace, brace, brace'...

Source: Bloomberg

Is that really where The Fed wants the US housing market to end up?