New Home Sales Beat Expectations In March

Ah, the bustling world of data and numbers. It's a bit like a rollercoaster ride at a theme park, isn't it? You're never quite sure what twists and turns await you, and today, the ride is all about new home sales. Buckle up, because it's been quite a morning for EcoData.

Philly Fed: A Tad Disappointed

Let's kick things off with Philly Fed, and well, it came bearing a bit of disappointment. Philly Fed nonmanufacturing just took us on a wild ride, and it's not one we'd want to revisit anytime soon. In fact, it's the weakest we've seen since December of 2020. Ouch!

But wait, there's more to this story. This disappointment had a ripple effect, pushing those elusive yields down. It's like trying to catch fireflies on a summer night – they're elusive and hard to pin down. Yields can be just as tricky.

March Madness: New Home Sales

Now, let's talk about something that's closer to the hearts of many – new home sales in March. It's been quite a dance, folks! Imagine this: 683,000 seasonally adjusted annualized units. That's not just a number; it's a beat for a change. A pleasant surprise, if you will.

But the real kicker? It's about 50,000 units better than expected. Yes, you heard that right. In fact, 683,000 is the best month-over-month pace we've seen since, well, March of last year when it soared over 700,000. That's nearly 10% higher than the still un-revised 640,000 we had in our rearview mirror. It's like a game of leapfrog, but with numbers!

Consumer Confidence Takes a Dip

Now, let's talk about consumer confidence for the month of April. We all had high hopes, expecting it to be at 104.0, but guess what? It's a big miss at 101.3. It's like ordering your favorite dish at a restaurant and getting something completely different.

This is the lightest level we've seen since July of last year. The present situation sits at 151.1, which equals what's in the rearview mirror, but hold on, that was revised to 148.9. And 148.9 last month was the lightest it had been all year, until December of last year happened. It's like trying to predict the weather; sometimes, you get it right, and sometimes, well, you're just left in the rain.

Finally, we have expectations for what lies ahead, and it's clocking in at 68.1. That's on the light side, the lightest since July of last year. It's like waiting for your favorite band to play an encore, and they only give you one song.

The Mystery of March New Home Sales

Now, let's turn our attention to the real star of the show – March new home sales. This one's a head-scratcher, and I'll tell you why. These numbers are based on signed contracts in March, so people were out there, shopping, putting their money down when mortgage rates were soaring above 7%. They were as high as a kite.

But here's the kicker – these homebuyers weren't deterred by those sky-high rates. The builders had a secret weapon up their sleeves – incentives, those mortgage rate buy-downs. That's why you saw demand still soaring. It's like a good magician; they have a few tricks up their sleeve to keep you in awe.

To add a little more spice to the story, March was revised down to 623,000 units. But here's the good news – the prices are still up 3% year over year. Builders are giving incentives, but they're not dropping prices. It's like a game of chess; they're making strategic moves.

What's even more intriguing is that the supply of new homes for sale is dropping. It had been over an eight-month supply, but now it's dwindled down. Existing homes aren't faring any better, with a mere 2.5 months of supply. Builders are reaping the benefits of this supply drought on the existing home side.

We saw it in companies like Pulte Homes, reporting better than expected earnings. D.R. Horton did the same last week. They all sing the same tune – strong demand from buyers because there's nothing for sale in the existing home market. It's like owning the only ice cream shop in the middle of a desert – everyone's going to come to you.

In a nutshell, it's been a rollercoaster of a morning. Disappointments, surprises, and a few head-scratchers along the way. The real estate market, like life, is a thrilling ride full of ups and downs. So, the next time you're sipping your morning coffee and pondering the state of the world, remember, even in the world of numbers, there's never a dull moment.