Home Prices In "Correction" Territory?
EPB Macro Research
Earlier today, we received an updated reading on New Home Sales "NHS" from the Census Bureau which showed some less than stellar data despite the recent decline in mortgage rates.
The volume of transactions for NHS neared the cycle peak a few months ago but has now dropped notably and sits 12% from the cycle peak recorded in November of 2017.
The median sales price of a new home fell to $308,000 which represents a decline of 10.3% from the peak median price of this economic cycle.
For newly constructed homes, home prices are in "correction" territory.
The year over year growth rate of the median sales price for newly constructed homes is also negative, falling 2.75% in this latest report. The trend in the year over year growth rate is also sharply negative.
Despite the massive drop in mortgage rates, housing data can't seem to find its footing, decelerating in year over year terms.
If housing data continues to decline with mortgage rate falling under 4% again, that is a major red flag.
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