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New home sale figures are out for December and they showed a Month-over-month (MoM) decline of -9.3%. However, on a YoY basis, new home sales rose +14.4%.
The biggest loser? The midwest, likely attributable to the Cleveland Browns winless season and the Cleveland Cavaliers trading their star point guard (Kyrie Irvin) to the Boston Celtics for a ball hog (Isiah Thomas) and a second-string power forward (Jae Crowder), declined -10% MoM. Or the blasting cold of midwest winters.
If we compare new home sales to existing home sales, notice that existing home sales (blue line) recovered faster than new home sales (white line) since the house price bubble burst and ensuing financial crisis and recession (purple line). Despite the growth in the US population, new home sales are at 1993 levels.
Like existing home sales, new home sales are plagued by a lack of new construction and inventory.
The lack of growth in new home sales is directly linked to the decline in sub-602 FICO borrowers applying for a mortgage.
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