This week, we've zeroed in on the housing market in our macro corner, though we'll likely shift our focus tomorrow. The recent new home sales figures were undeniably positive, reporting $714K against an expected $704K, with a minor revision for the previous month. The Midwest recorded a seasonally adjusted Y/Y rise of 47.4%. Today's bonus chart reveals the U.S. months’ supply of new single-family houses stands at 7.3 months, a decline of -27.72% from 10.10 months the previous year.
Many feel tethered to their current residences. MBA mortgage applications have nosedived to their lowest since 1995 as the interest rate on the 30-year reached 7.31%. Remarkably, almost 30% of all U.S. homes for sale are newly constructed, a figure nearly double the 17% seen in 2008.
Even though the 30-year mortgage rate hovers above 7%, the average rate held by Americans stands at 3.6%. About 62% of households have a mortgage below 4%, and 90% maintain rates under 5%. Fewer than 10% have rates exceeding 6%. This suggests that for 38% of the populace to feasibly move homes, mortgage rates would need to drop by 330 bps. That’s a lot!!
