New home sales bounce from depressed level

New Home Sales totaled 329k, 29k higher than expected and up from a revised 280k in Nov (revised lower by 10k). It’s the best sales rate since Apr but not far from the low of 274k in Aug. The avg 30 yr mortgage rate was 4.93% in Dec, up from 4.44% in Nov so there may have been a rush to sign the contract and lock in rates on the fear they would move even higher. With the total # of new homes for sale falling to the lowest since ’68 combined with the uptick in sales, months supply fell to 6.9 from 8.4, the lowest since Apr ’10 and is getting close to the 10 yr average of 6.1 encouragingly as with still too many existing homes, we don’t need many new ones. Regionally, almost all of the sales took place in the West, strangely where most of the excess existing home inventory is. The median price rose 8.5% y/o/y. Net-net, housing continues to bounce along the bottom as we’re well aware that a bubble of the extent we had takes many yrs to work thru.

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