New Home Sales Plunge in May: New Home Sales Plunge in May as High Interest Rates Weigh on Affordability Fed Chair Powell and his dimwitted democratic federal bank presidents like Austin Goolsby of the Chicago Reserve Bank are trying their best to wreck the American economy by leaving rates 1% higher than where they should be. A reduction on 1% would likely yield some relief: U.S. sales of newly built homes dropped sharply in May, falling to their lowest level since October as high mortgage rates continued to strain affordability and sideline prospective buyers. Purchases of new single-family homes fell 13.7 percent from April to a seasonally adjusted annual rate of 623,000, the Commerce Department said Wednesday. It was the largest monthly decline since the summer of 2021 and came in well below economists’ expectations. The steep pullback signals persistent weakness in the housing market, where elevated financing costs have eroded purchasing power despite price incentives and mortgage-rate buydowns offered by builders. The average 30-year fixed rate has hovered near 7 percent in recent weeks, limiting what many households can afford and pushing others out of the market altogether. The Federal Reserve has kept its benchmark interest rate steady since President Donald Trump took office, resisting calls by the president to cut interest rates despite inflation declining to below its two percent target in recent months. Fed chairman Jerome Powell has said that while low inflation would justify continuing the cuts the Fed began last year, while Joe Biden was still president, the central bank is holding off on further cuts because it expects tariffs will push up prices.
TACO creates chaos, but whines that the Fed is what makes him look bad. Maga supports the whine. Of course.
Nevermind that it's all massively overinflated in the first place. Adding to that is they position everything as "luxury" so they can add even more margin. When I saw a complete dump I wouldn't have paid 100K for in 2010 go for 500K, you knew it was all BS. Crappy house, crappy yard, crappy neighborhood on a major road with bus line. GTFOH!
Damn, Trump even screwed up the housing market. ETTD Luckily, sold our house in May. Last home I will ever own.
Feds cahooted to have big rate cuts before election, a no no. Now refuse to cut for pubs even though needed.
Maybe the "high" interest rates will bring about some reductions in home prices. Seems the low rates during much of the previous administrations served to push the average home price too high. I had an 11.75% rate for my first home with 4 points upfront. Not too long after that, rates hit the high teens. While 7% might be too high for a mortgage .... treasuries in the 3.5-4.2% range are about right. There's no need for risk-free rates to be much lower.
So it appears that once again, as usual, this poster fails to give a reliable link to verify his assertion of a Fed conspiracy. But then again water is wet. LOL
You still don’t understand that 10-year treasury yields and mortgage backed securities drive mortgage rates?
Several reasons, really. - Had a pretty large house in a great hood but both boys are gone and they will not live in ATL. - We travel a lot, often for extended periods of time. I was always nervous leaving the home empty for so long. We've had two leaks and one of those wasn't from plumbing. - Just tired of maintaining the house and yard. Yes, renting a 2200 sqft townhome with a two car garage. While the house was paid for, it still cost about 1500 per month from taxes, insurance and other house specific costs (termites, big water bill....). Taking out that cost and adding in the dividends from the sale of the property and we are actually way ahead. My rental insurance is $7/month. Water bill was $8. Being without a home was weird for a bit. Smaller kitchen was tough, amenities not quite as good as the house. Also, it was just really odd to not have a house but that fades every day. Traveling all of september in Asia and it will be nice to not even think about the house. Still have large property in OK but FIL lives there full time and it is really just a hunting/fishing place for me. FTR, I am 61.
He is like Too Hots version of an incel. He exiles himself and when he does try to come out of the closet; the world notices why he was in the closet in the first place. Maybe if TACO didn’t threaten tariffs every other week, the Fed would see the consistency they have been asking to see to lower the rates.
There is also a lot of preemptive inventory that is still being utilized that factors into tariff based inflation not yet being fully visible.
Thanks for sharing. Once you break it down, even with your home paid off it cost you over 1500.00 monthly. That’s a great call for you especially since you enjoy traveling. I guess if you bought back in your taxes would increase and it would be even worse. Very cool.
Excuses. The drop in sales isn't because of mortgage rates. New home sales dropped 6.3% from May 2024 when mortgage rates were actually higher than they are now. People have no confidence in Trump's economy, nor should they. As with businesses, individuals don't want to make major financial decisions with all the chaos and uncertainty brought on by TACO Trump's ever-changing policies.
