New home sales hit 10-month high in January 2023

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New home sales data reaches 10-month high, over 600k for 2nd month

In a report released by the US Census Bureau and the Department of Housing and Urban Development, new home sales hit a 10-month high, and cleared 600k units for the second straight month. The January total was at about 670,000 units sold, up from 625,000 units in December. This is also the best monthly performance in home sales since last March.

The region that performed the best? Southern states showed a 17.1% increase month-over-month.

How about Friday’s inflation report?

The core personal consumption expenditures price index, the preferred measure of inflation by the Federal Reserve, rose 0.6% in January, and was up 4.7% from the prior year. Both metrics came in above analysts’ expectations and triggered a sell-off in the stock market.

The concern here is that it shows the Federal Reserve still has a long way to go in getting inflation under control, and interest rates will need to go higher and stay there for a longer period than expected.

The ‘glass-half-full’ view was that the inflation report mirrored some of the other data points from earlier in the week. Jobs and consumer spending data were both up, so it makes sense that inflation followed.

What are ‘absentee homeowners’ & are they crowding the market?

Recent data released from the US Census Bureau showed that Americans are migrating to the Sun Belt and away from major population centers. Florida, Texas, and the Carolinas saw the largest influx of residents. California, New York, and Illinois saw the greatest decreases. This mirrored a lot of what we’ve seen in the housing market. Metro areas in the Sun Belt have recently seen an increase in demand while certain metros in California have started to cool.According to a report from NBC News, the number of homes sold to absentee homeowners has increased since 2020 across nine major metropolitan areas. What is an ‘absentee homeowner’? The report defines it as a homebuyer in the market for properties that won’t be their primary residence. In other words, the number of people buying homes for investments, second homes, or rental properties is increasing.

The report claims that the common denominator in these markets is that cash buyers are pushing borrowers out of the market.

The good news is that the team at Guaranteed Rate can help with borrowers competing with cash buyers. Learn more about how PowerBid can help you compete with cash buyers and put our power behind your bid.

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