Although mortgage rates are climbing to a vertigo-inducing 8% level and home prices remain at historic highs, Americans are out buying new single-family houses with gusto.
According to new data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, sales of new single‐family houses in September were at a seasonally adjusted annual rate of 759,000 – up by a significant 12.3% from the revised August rate of 676,000 and up by a staggering 33.9% from the September 2022 estimate of 567,000.
However, the bulk of activity was focused in the South (with 456,000 houses sold last month) and the West (with 187,000). Activity was considerably less corybantic in the East (49,000) and the Midwest (67,000).
The median sales price of new houses sold in September 2023 was $418,800 while the average sales price was $503,900. The seasonally‐adjusted estimate of new houses for sale at the end of September was 435,000, which represents a supply of 6.9 months at the current sales rate.
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The gloom and doom profits are wrong? Not sure about the prognosticators and their accuracy rate, but it’s not reliable and often far off the reality.
For 20+ years the see-rs of see-ers spurred dire fears of exploding interest rates, which did not happen, until they finally rose above 5% last May 2022.
They are now 8%, which is only serving to harm some homeowners in certain markets, but those high rates are hurting buyers who need a loan.
There are ways to reduce inflation without raising the Fed rate so high, but we refuse to consider those options, like capping prices for daily living costs, like food, gas, water, energy, just like we did during World Wars.
The industries that sell us daily, weekly, and monthly consumer products are making record profits with NO downward forces on prices from our government, but homeowners and buyers are always hit with forces that hamper maximizing their financial successes. Why is the focus only on interest rates? Well, the winners are cash rich people and industries that have freedom to charge whatever the market will bear, the usual winners in the game of Fed regulations.
Israel in the 1980’s did a great job of cooling an inflation rate that was dramatically higher than we have ever had, and they did it without raising interest rates. Instead, they opted to focus on limiting wage increases while also limiting the costs of consumer goods. I read the article last year, and it was very interesting.
What youre describing is communism, North Korea might be a place you want to visit.
Don’t forget to record prices on real estate as well? They slowly followed after everyone was making record profits from Covid refugees. Everyone left the congested cities with the lockdowns and ended up in their own single-family home with their own pool or whatever other things they wanted. It will balance itself out at some point. The rates are just met slow things down and they have.