Did higher interest rate fear trigger new home buying spree?
Earlier today, the U.S. Census Bureau released figures for sales of new single-family houses in July 2016. The headline figure was staggering at a seasonally adjusted annual rate of 654,000. This was a jump of 31.3% compared to July 2015 and 12.4% above June’s revised number of 582,000. These are not hard numbers, rather they are estimates based upon surveys. These eye-popping numbers should not be taken as cold hard fact and are likely to be revised (many times over). Nonetheless, they are positive for homebuilders and for U.S. economic growth at least in the short-term. Another possible explanation for the surge could be the constant teasing by the Fed to raise rates. Perhaps some buyers finally jumped off the fence in July out of fear of higher mortgage rates later on.