US New Home Sales Unexpectedly Soared In January As Prices Plunge

Before we dig into this morning’s new home sales data, we note that both homebuilders and homebuyers have seen a rebound in confidence this year (even though the latter remains near extreme lows as one would expect)…

Source: Bloomberg

Despite soaring mortgage rates, mass layoffs, and barely perceptible price drops, new home sales have risen for the past three months and were expected to rise once again in January (despite an ongoing slump in existing home sales)… and they did – soaring a ridiculous 7.2% MoM (against expectations of a 0.7% MoM rise) and left sales down 19.4% YoY…

Source: Bloomberg

The surge in sales was driven almost entirely by purchases in the South, and the print was far above even the rosiest of forecasts.

That leaves the new home sales SAAR at 670k – the highest since March 2022…

Source: Bloomberg

The median new home price tumbled from $465.6k to $427.5k…

New home prices are catching down to existing home prices…

Is this what Powell wants?