Urethane Blog
New Home Sales
August 23, 2023
US New Home Sales Soar To 17-Month Highs In July As Mortgage Rates Spike
by Tyler Durden
Wednesday, Aug 23, 2023 – 10:08 AM
After the disappointing (but not unexpected) decline in existing home sales, new home sales – of course – saw a big upward surprise 4.4% MoM surge in sales, leaving year-over-year sales up an astonishing 31.5%…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/bfm696B_0.jpg?itok=6_QUXasH)
Source: Bloomberg
The divergence between new and existing home sales continues to gape wider…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/bfmAB3B_0.jpg?itok=E2ZlKtyr)
Source: Bloomberg
As a reminder, we have seen huge downward revisions to new home sales figures this year…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/bfmE648.jpg?itok=MVrF2Mcg)
Source: Bloomberg
Supply continues to shrink…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/image%20-%202023-08-23T071248.772.png?itok=hwQoQFF9)
Source: Bloomberg
…which helped push median new home sales prices back up in July – even as mortgage rates began to spike…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/image%20-%202023-08-23T070544.481.png?itok=Bm31rT3a)
Finally, we note the dramatic gap between the current 30Y mortgage rate and the effective rates that borrowers are currently paying on their home loans…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/bfm2F76.jpg?itok=fKg1JEda)
Source: Bloomberg
The gap hasn’t been this wide since the early 1980s – which helps explain why inventories of existing homes for sale are so low… and thus ‘new homes’, subsidized by homebuilders, is the only option for many.
That’s quite subsidy…
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/bfmFF64.jpg?itok=UixhLUp9)
Are home-builder stocks starting to catch on?
![](https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/bfm4837_0.jpg?itok=0SEexwfV)
But how long can homebuilders continue bleeding profitability to fill that gap?
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