New-home sales pop, but supply is shrinking
Elevated mortgage rates and ample supply have given homebuilders an advantage over sellers of existing homes because they’re able to offer significant rate concessions to buyers while offering more choices. These advantages are evident in the data.
The U.S. Census Bureau and U.S. Department of Housing and Urban Development reported that new-home sales hit a seasonally adjusted annual rate of 739,000 in July. This is a whopping 10.6% jump compared to June and a 5.6% rise year over year. While these numbers are better than expected, HousingWire Lead Analyst Logan Mohtashami said that other data foreshadowed the jump.
“New-home sales grew better than expected but there were clues on this earlier,” Mohtashami said. “HMI builder survey data had two slightly positive months of growth in the category of demand looking out six months for single-family homes.
“The purchase application data for the new-home sales sector grew last month and it’s a monthly survey. And Toll Brothers commented [in its earnings call] that their traffic was better in August as rates went even lower.”
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