US New Home Sales Increase in September Amidst Falling Rates
Despite the slump in existing home sales to the lowest seasonally adjusted annual rate (SAAR) levels since 2010, the US housing market is still hopeful due to the new homes market. Analysts had predicted a 0.6% month-on-month (MoM) increase in sales after a drop of 4.7% in the previous month.
New Home Sales Rise 4.1% MoM
The optimism seems to be justified as new home sales rose 4.1% MoM. The year-on-year (YoY) data, although inconsistent, is back at +6.3%.
The total New Home Sales SAAR is 738k, the highest it has been since May 2023. However, the last three months have seen significant downward revisions to the new home sales SAAR.
Modest Rise in Median New Home Price
The median new home price saw a modest MoM increase, but it continues to remain within a relatively narrow range.
Impact of The Fed's Rate Cuts on Prices
With The Fed starting to cut rates, it remains to be seen what impact this will have on prices.
Political Uncertainty Affecting Home Sales?
Lawrence Yun, a cheerleader for the National Association of Realtors (NAR), attributes the lack of a significant rebound in home sales, despite lower mortgage rates, to political uncertainty. He suggested that some consumers might be hesitant to make a major expenditure like purchasing a home before the upcoming election.
Bottom Line
Despite a slump in existing home sales, the US housing market remains hopeful due to an increase in new home sales. However, political uncertainty and rate cuts by The Fed could impact future sales and prices. What are your thoughts on this? Do you think the housing market will continue to improve or will it be affected by external factors? Share your thoughts with your friends and join us for the Daily Briefing at 6 pm every day.
