US new home sales were expected to dip 0.2% MoM in May… but they didn’t…

New home sales crashed 11.3% MoM (after April’s 4.7% drop was revised up to a 2.0% MoM rise). That is the biggest MoM drop since Sept 2022…

Source: Bloomberg

This is the biggest YoY drop since Feb 2023, taking the SAAR down to the same level as it was in 2016…

Source: Bloomberg

Median new home price fell 0.9% YoY to $417,400 – lowest since April 2023 – (with the average selling price at $520,000) with a big downward revision for April from $433k to $417k!…

Source: Bloomberg

For the first time since June 2021, median existing home prices are above median new home prices…

Source: Bloomberg

As BofA warned yesterday:

“The US housing market is stuck, and we are not convinced it will become unstuck anytime soon. After a surge in housing activity during the pandemic, it has since retreated and stabilized. We view the forces that have reduced affordability, created a lock-in effect for homeowners, and limited housing activity will remain in place through our forecast horizon “

At the same time, the supply of available homes increased to 481,000, still the highest since 2008.

Source: Bloomberg

New home sales are catching down to the reality of mortgage rates continuing to hold above 7%…

Source: Bloomberg

It seems homebuilders finally gave up filling that gap in anticipation of an imminent Fed rate-cut to save the world.