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New Homes Suffer Biggest Two-Month Price Drop Since Lehman, Second Highest Ever

That’s ok though: soaring mortgage rates are having “zero impact” on prices, give or take, according to the TeeVee. And really, all that’s needed is just a little more record-er Option ARMs.

 

First the bad news (which for the market is good news): the revised May New Home Sales number was 459, down from 476K, which means last month’s beat of expectations of 462K was actually a miss which would have sent the S&P soaring. Now the good news (which for the market is bad): the June New Home Sales seasonally-adjusted annualized number was 497K: the highest since May 2008 (even if far below the prior housing bubble peak) represented by an unadjusted June number of 48K actual houses sold, with more than half of it coming from the 26K new homes sold in the south.

So good right right? Not really: the reason why there was a pick up in volume was not because there was far greater demand, but for the usual Economics for Dummies reason why there is demand: prices plunged.

As the chart below shows the average and median home prices both tumbled to the lowest since November 2012. But what is not made up in price at least will be more than made up for in volume.

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