New Home Sales Suddenly Soared In July… Prices Jumped As Mortgage Rates Tumbled

US new home sales soared by 10.6% MoM in July (the most since Aug 2022), five standard deviations above expectations…

…which pulled sales up 5.6% YoY…

Source: Bloomberg

That unexpectedly massive surge pushed new home sales SAAR up to 739k – its highest since May 2023 (just shy of Feb 2022)…

Source: Bloomberg

Bear in mind that the last three months have seen massive upward revisions for new home sales data (which is very much not the norm of the last few years)…

Source: Bloomberg

…as mortgage rates have tumbled back below 7.00%…

Source: Bloomberg

The pickup in sales allowed builders to make a dent in inventory last month, which fell to the lowest level since the start of the year.

Nonetheless, the 462,000 homes for sale is still near the highest since 2008.

At the current sales rate, that represents 7.5 months of supply, the lowest since September but above pre-pandemic levels.

But  the median price of a new home rose once again (and back higher than used home prices)…

Source: Bloomberg

…and we are sure that Kamala’s new plan to increase homeownership will really help that!