You could ask any number of our clients and they will tell you we've been bearish on the U.S. housing market for the past few years, well it looks as if it's coming to fruition:
The 11.4% MoM plunge in new home sales in April was 5 standard deviations below expectations and the biggest since March 2015. Year-over-year, new home sales have tumbled back to unchanged.
The surge in mortgage rates (and tumble in affordability) is filtering through to actual sales.
New home sales fell 73k in April, with the Median new home price falling 3.8% y/y to $309,200
12% of new homes sold in April cost more than $500,000, down from 18% last month. Months’ supply at 5.7 in April compared to 4.9 in March.
And the biggest driver of new home sales collapse was in The West - which saw a 26.3% collapse - the most since Oct 2010.
And yet the Fed is claiming the economy is strong and they are itching to raise rates once again. If they do they run the risk of making things even worse!
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