While the homebuilders weren’t surprised by the better-than-estimated new home sales report released Friday, some people were a bit shocked. But the forward-looking purchase application data was getting better from Nov. 9 up until the early part of February as mortgage rates fell from 7.37% to 5.99%. Now, of course, that has all changed quickly.
On CNBC Friday morning, I highlighted that whatever data stabilization we had at 5.99%, it’s now gone in the blink of an eye.
The homebuilders are crafty people (pun intended). They move homes like they are commodities, not as a secured form of shelter they live in. They don’t ever have to have the conversation about how low their total payment is in the new home they’re buying, unlike some of their buyers (which explains higher cancellation rates).