New Home Sales Plummet: Big Wake Up Call or a Logical Shift?

The housing market has been keeping its head down, keeping calm, and carrying on in the face of the biggest rate spike since the 1980s. The ability to ignore higher interest rates is nothing new for home sales. In fact, sometimes we see almost no reaction in sales numbers when rates rise. The following chart shows several of the biggest rate spikes of the past decade (and yes, they do look small in comparison to 2022). While there is perhaps some small impact on new home sales, it's minimal at best. Perhaps home price stability had something to do with that, or perhaps those rate spikes weren't big enough to have a major impact in their respective home price environments. Perhaps sales were simply still experiencing a rebound effect from the housing crisis. Whatever it was that accounts for the resilience in the past, it's clear that something new is happening right now. Moreover, it is happening QUICKLY. Just last month, New Home Sales were still at 763k, a level not seen between the housing crisis and the pandemic. Now in today's new numbers from the Census Bureau, New Home Sales have plummeted to the lows seen only a few times in the 3 years leading up to the pandemic. Let's not overcomplicate this: whether we're talking about new or existing homes, prices have surged at the fastest pace on record. This has occurred in spite of wages growing at nowhere near the same pace.

May 24, 2022 Download our Mobile App: Download our Mobile App: Housing News New Home Sales Plummet: Big Wake Up Call or a Logical Shift? The housing market has been keeping its head down, keeping calm, and carrying on in the face of the biggest rate spike since the 1980s. The ability to ignore higher interest rates is nothing new for home sales. In fact, sometimes we see a... (read more) MBS Commentary MBS Live Recap: Rate Rally Returns With Help From Housing Data Rate Rally Returns With Help From Housing Data How about a good, old-fashioned market reaction to weaker economic data? We've seen it a few times recently, but not in response to an "almost never" marke... (read more) Mortgage Rate Watch Lowest Rates in More Than a Month Mortgage rates have generally been moving lower for more than 2 weeks now. Today's gains were enough to bring them to their best levels in just over a month. Compared to the most recent highs (also the highest levels in more than a decade), the... (read more) Rob Chrisman Fee Collection, Subservicing, Processing, Sales Tools; Events and Webinars Through June The last pay phone was removed from New York City yesterday. (Heck, growing up I financed my baseball card purchases by looking for loose change in those and newspaper vending machines.) Communication is certainly always changing, and successful loan... (read more) Mortgage Rates Lowest Rates in More Than a Month 30 Yr. Fixed Rate 5.29% -0.07% Rate Change Points Mortgage News Daily 30 Yr. Fixed 5.29% -0.07 0.40 15 Yr. Fixed 4.75% -0.04 0.40 30 Yr. FHA 4.75% -0.25 0.00 30 Yr. Jumbo 4.68% -0.07 0.00 5/1 ARM 4.46% -0.04 0.50 Updates Daily - Last Update: 5/24 15 Yr. Fixed Rate 4.75% -0.04% Rate Change Points Freddie Mac 30 Yr. Fixed 5.25% -0.02 0.90 15 Yr. Fixed 4.43% -0.09 0.90 5/1 Yr. ARM 4.08% +0.12 0.20 Updates Weekly - Last Update: 5/19 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 5.49% -0.04 0.74 15 Yr. Fixed 4.73% -0.06 0.82 30 Yr. Jumbo 5.03% -0.05 0.61 Updates Weekly - Last Update: 5/18 MBS / Treasuries MBS Live Recap: Rate Rally Returns With Help From Housing Data UMBS 30YR 4.0 100.16 +0.52 Price / Yield Change MBS UMBS 4.0 100.16 +0.52 UMBS 4.5 101.77 +0.45 GNMA 4.0 101.00 +0.47 GNMA 4.5 102.19 +0.42 Pricing as of: 5/24 5:21PM EST 10 Year US Treasury 2.7596 -0.1009 Price / Yield Change US Treasury 2 YR Treasury 2.485 -0.144 5 YR Treasury 2.746 -0.130 7 YR Treasury 2.785 -0.114 10 YR Treasury 2.760 -0.101 30 YR Treasury 2.974 -0.091 Pricing as of: 5/24 5:21PM EST Latest Video Sales of new homes fall 16.6% in April, well below expectations Ackman says Fed needs to 'put a line in the sand on inflation' 'The Fed is in an impossible situation,' says Komal Sri-Kumar The 9am Bond Report - May 24, 2022 Around the Web Calculated Risk Blog New Home Sales Decrease Sharply to 591,000 Annual Rate in April Eye on Housing Missing Middle Construction Still Missing CNBC Buyers are making concessions to nab a home. Heres what theyre doing Calculated Risk Blog Housing Inventory May 23rd Update: Inventory UP 8.2% Week-over-week Calculated Risk Blog FDIC: Problem Banks Declined, Residential REO Increased Slightly in Q1 2022 Calculated Risk Blog Final Look at Local Housing Markets in April CNBC Treasury yields fall as investors monitor economic data CNBC A 'bear market' looms. What does that mean? CNBC ECB rate hikes in July and September are likely a done deal, France's Villeroy says Reuters ECB likely to get out of negative rates by September, Lagarde says CNBC JPMorgan Chase backtracks on key performance target, says it can reach 17% returns this year Calculated Risk Blog Q2 GDP Forecasts: 2.5% to 3.0% CNBC Treasury yields rise as inflation and economic growth concerns linger

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