The healthy rise in new home sales in November primarily reflected a downward revision to the previous month’s reading. Nevertheless, new sales activity is still elevated compared to its pre-COVID-19 level, albeit increasingly focused on the higher end of the market. Indeed, for the first time since records began in 2002 no new homes were sold for under $200,000. As mortgage rates rise, affordability constraints will start to cool sales and we expect a modest rise to around 800,000 annualised by end-2022.
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