Where’s the bottom for new home sales?

Sales are already historically low, back to 1996 levels when rates were near 8%. September new home sales beat expectations, but don’t get too excited. While monthly supply rose in this report, the previous reports were all revised lower and sale levels are still historically low. New home sales are now below the recession levels of 2000 and have fallen all the way to 1996 levels, when interest rates were near 8%.

We have not had a massive credit sales boom like the one we saw during the housing bubble years, so we can’t have a similar huge sales bust working from such historically high levels. This is a positive in the sense that this downturn is more manageable: sales weren’t elevated with a credit boom boosted by exotic loan debt structures, so finding that bottom level in sales is more reasonable.

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