US New Home Sales Unexpectedly Plunged In May To Lowest In A Year

Following yesterday’s slightly better than expected existing home sales (which was still a 4th straight monthly decline), analysts expected May new home sales to rebound very modestly from the 5.9% plunge in April… they were wildly wrong!

New home sales plunged 5.9% MoM in May and April’s crash was revised even lower (-7.8% MoM)…

Source: Bloomberg

This unexpected drop pushed the SAAR sales print to 769k (against expectations of 865k) – the lowest since May 2020

Source: Bloomberg

The median new home price is up 18.1% YoY to $374,400 (average selling price at $430,600) and is being blamed for the drop in sales as affordability collapses.

None of this should come as a surprise given the total collapse in homebuyer sentiment (and when did homebuilder sentiment actually count for anything?)…

Source: Bloomberg

With The Fed ‘talking about, talking about’ tapering and raising rates (at some point in the future), mortgage rates are already starting to rise…

Source: Bloomberg

Get back to work Mr.Powell.