Posted on 01/26/2022 8:02:02 AM PST by Browns Ultra Fan
US new home sales spiked in December by 11.9% from November, but were down 14% year-over-year.
But the median price of new home sales (YoY) declined to 3.4%.
The Midwest saw a surge in new home sales (+56%).
The MBA’s mortgage applications index shows declining purchase applications (-1.83%) and declining refinancing applications (-12.60%) as mortgage rates increased from 3.64% to 3.72% for the week of 01/21.
Now, mortgage purchase applications rose for the week of 01/21 if we used non-seasonally adjusted data.
Share this:
(Excerpt) Read more at confoundedinterest.net ...
People who were on “the bubble” are rushing in to get their low interest rate.
That’s OK, but shortly after mortgages move towards traidtional rates (5-6%) the housing market is going to take a huge dump. All of these recent buyers are going to be under water. And it will look like 2009 again.
I cannot wait.
Declined from record high sales last year.
Seasonal weakness during the winter. Wait and see what happens come springtime.
And the mass exodus out of blue states has only just begun.
Real estate prices will continue rising IMO.
Momentum works both ways... up AND down.
And it will look like 2009 again.
************
I agree that mortgage rates in the 5-6% range will have an impact but conditions are much different now. We have the potential for strongly rising inflation and pressures from people escaping the blue hell holes.
Despite inflation fears I don’t see a dovish Fed jacking up rates to the point that it crashes the real estate market. That’s a risk this Fed is simply not willing to take, especially during an election year.
Inventories of homes in safe and desirable communities are extremely low.
“Real estate prices will continue rising IMO.”
3-4 million illegal and legal immigrants coming in every year, yep.
Add in record number of foreign buyers looking for a safe haven for themselves and their money.
Work from home people buying houses in the country in record number getting away from crime.
I suspect we will have a slowdown but it will remain strong,
Sound arguments.
We will see. I dread thinking what DC will do if the 10 year approaches traditional values. The debt service would be enormous.
“All of these recent buyers are going to be under water. And it will look like 2009 again.
I cannot wait.”
Not like 2009. Don’t hold your breath while waiting.
I don’t see my home as an investment. It is where I live.
I hope prices crash to nothing so I won’t have to pay taxes to the government for something I bought and OWN! without their help.
I’m probably a rare exception as I am debt free and own my home and property fee simple.
What drives me nuts is people that think their homes are something other than a place to live and raise a family.
That is the true value of a home, even if it is “underwater”
you have a place to live. Many people in the world do not have such a luxury.
I am starting to hear ads for HELOCs again. People will and are, cashing out their homes.
It’s not going to happen next week….but it will happen.
Agree inventory is low. I was listening to an earnings call for a company is the building supplies industry and they said that there is a 1.2M deficit of available homes in the US
Home prices, in TX, are still going gangbusters and holding strong, for now.
But....we are FULL, so that could quickly change ;-)
There’s also a brisk second home market in this country. Everybody wants one.
Desirable places, especially in coastal areas, the real estate is absolutely booming.
It’s hysterical how consistenly wrong this site is.
Bulletin up this morning oat MarketWatch:
“New Home Sales Surge higher As Supply Shrinks.”
“The Midwest saw a surge in new home sales (+56%).”
I can attest to this. My BFF is a Realtor and she’s never been busier. You can look to any of our smaller towns and there is new home/apartment construction on the edges of all of the towns.
Two young families that I know could NOT find existing homes to buy for their growing families, so they’ve both had to build and buy new. One here in WI and one in TX.
The town I grew up in, about an hour away, looks like a major metro area to me now, as it’s being absorbed into the Big City right next to it. Remember the term, ‘Bedroom Communities?’
This is something not lost on the Fed. Rising rates = rising debt service on an enormous amount of debt.
All things considered I don’t believe the Fed will raise rates more than four times this year (25 bp each time) and will try to rely on other tools to slow down inflation. But they certainly have painted themselves into a corner.
The Fed had lots of opportunities in recent years to increase rates but they refused to do the right thing. Inflation has now gotten a foothold. What a mess we’re in.
It’s hysterical how consistently wrong this site is.
I agree it’s comical. You should see Luzerne County PA. Unbelievable housing market!
The 14% reduction is from last year this time. But yes, the media tends to paint the seasonal slowdown as a negative. Sales typically slow after school starts...Thanksgiving to Christmas is usually a real downtime. But, LOL...catches the media by surprise every year. Springtime marks the traditional increase. As long as blue states are falling apart, conservative states will reap the benefits of increased sales and price increases.
‘’ For the full year, sales decreased to 762,000 from 822,000 in 2020’’
I find these numbers amazing. So many statistics are gamed when based upon 2020 with its lockdowns and the damage that did
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.