May 24, 2022 1 min read

Homebuilders Slammed As Sales Fall, Costs Soar

Homebuilders Slammed As Sales Fall, Costs Soar

There's lots of stagflation in the new home market. During April, new home sales (registered when contracts are signed) dropped 16.6% m/m and the months' supply of new homes jumped to 9.0 from 6.9 in March. Here's more:

(1) The m/m sales declines were widespread in the South (-19.8%), Midwest (-15.1), West (-13.8), and Northeast (-5.9).

(2) The median price of a new home rose 19.6% y/y to a record $450,600. It is up 45.3% over the past 24 months, while the average price is up 58.3% over the same period!

(3) Those incredible price increases are partly attributable to fewer sales of lower-priced homes. In addition, the final demand PPI for construction was up almost 20% y/y during April.

(4) The Fed has increased the federal funds rate by only 75bps so far this year, but a combination of soaring home prices and rapidly rising mortgage rates have slammed the affordability of buying a home.

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