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Well we got some information out of us new home sales today in it is not good well it’s not good if you’re a seller actually really good news if you’re a buyer we got to get into this guy’s us new home sales tumble eight point nine percent in october dropping to more than a two-and-a-half year load the commerce department said new home sales drop eight point nine

Percent to a seasonally adjusted annual rate of five hundred forty four thousand units last month new home sales in the south which accounts for the bulk of the transactions declined seven point seven percent to their lowest level since july of 2017 the median new home price in the united states fell three point one percent to three hundred nine thousand october

From a year ago economists pulled by reuters had forecasted new home sales which account for about nine point four percent of the housing market sales rising three point seven percent to a pace of 575 thousand units in october so that’s a massive massive difference there between what analysts were expecting versus what actually came in their new home sales are

Drawn from permits and tend to be volatile on a month-to-month basis they decreased twelve percent from a year ago data last week showed moderate increases at home building in the sales of previously owned homes in october the housing market is taking a hit from higher borrowing costs further pushing home ownership out of the reach of many workers the 30-year fixed

Mortgage rate is currently four point eight one percent not far from the seven-year high of four point nine four percent according to data from mortgage finance agency and freddie mac now first off here as far as you know being close to a seven-year high keep in mind that we’ve had you know some of the lowest interest rates the over the last seven years that we’ve


Had historically for a long time right generally interest rates if you look at the united states are you know in the past and whatnot aren’t generally this low so we’ve had very very low interest rates for a long long time all right while home price inflation is slowing as demand for purchase cools it continues to outpace wage growth this is a little worrisome

Obviously home prices increase 5.1 percent year-on-year in september in contrast to wages which rose 3.1% in october it’s never good to see home prices actually rising at a steeper steeper rate than wages usually if anything you want wages to be outpacing you know the average home growth out there or at least kind of keeping in line something around there all

Right new home sales in the south which accounts for the bulk of the transactions declined seven point seven percent to their lowest level since july of 2017 sales fell 3.2 percent in the west and plunged eighteen point five percent in the northeast to their lowest level since september 2015 they tumble 22 percent to a two and a half year low in the midwest the

New median home price fell 3.1 percent to three hundred nine thousand october from a year ago there were three hundred and thirty six thousand new homes on the market in october the most since january of 2009 and up 4.3 percent from september supply is however just over half of what it was at that peak of the housing market boom in 2006 at october sales pace it

Would take seven point four months to clear the supply of houses on the market the most since february of 2011 from six point five months in september right so all of this news around new home sales you think this would just be killing the home stocks today you like this is some of the worst data we’ve seen around new home sales so you would assume like the homes

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The the housing stocks just be must getting destroyed today right they’re not actually all pretty much you know breakeven or up today on a day that you think they were just getting be absolutely destroyed even though the markets are having a good day right sometimes you can get stocks that have just been beaten down like to all the housing stocks have been beaten

Down so bad already in 2018 that they have priced in so much bad news already that these stocks that who you know if when the bad news actually does come it doesn’t really it’s almost like the same thing can happen with stocks on the upside right sometimes stocks can go up so much so fast right then they’re just like the hike just builds around that stock in the

Height builds and builds and builds that when the great news does come it doesn’t move the stock in people are like what all this great news they killed earnings blah blah blah and the stock didn’t move well sometimes stocks just go on the downside the same exact thing can happen a stock can just get pushed down push down push down and when bad news actually does

Come it doesn’t even move the stock down because there’s so much bad news has already come all right know something i see very interesting is if you look at the median home price sold for new homes over the you know basically the course of the last let’s say twelve months or so you’re gonna see it’s just been falling and falling and falling from november was around

Three hundred forty three thousand stayed consistent on december and then it started falling from there and here in october we’re down to around three hundred in nine thousand dollars there so what i would say out there in the real estate market is we’re moving from a market that was definitely in in the seller’s advantaged like sellers had all advanced who now


Actually we’re gonna move into a buyers market which is good if you’re looking for a home all right so 2019 i’m calling it the year a good year for buyers out there whereas 2014 through to the you know 2017 those have been great years for sellers you know sellers have been able to give top price there and it’s just been phenomenal for them and that’s awesome right

But if you’ve been a buyer in the market over the last few years you’re gonna see a lot of homes elevated prices so it’ll be fun to see now you know us buyers actually and i’m looking for a home probably in 2019 a new home and whatnot for my family so it’s a good year to be a buyer out there my personal opinion interest rates are still low on historical standards

Let’s say something does happen in the economy interest rates low lower you can always refinance or something like that but i think 2019 will be a good year for buyers out there rather than sellers like it has been for several several years out there i want to know your guy’s opinion down there around new home sales do you think there’s going to get much worse do

You think we’re gonna kind of stagnate here for a little bit what do you guys think about the housing market in general you think it’s a seller’s market or buyers market well as we move into 2019 i would love to hear from you guys in that comment section there’s always one more video coming today it’s a wrap tesla thank you for watching and have a great day

Transcribed from video
NEW HOME SALES DOWN BIG By Financial Education

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