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!!
