New home sales were essentially unchanged in June after their 15% slump the month before, not helped by mortgage rates which remained stubbornly high at around 7%. So far in July, borrowing costs have declined and currently sit at 6.8%. Therefore, next month’s release will give a clearer steer on whether the recent weakness in new home sales has been driven by elevated mortgage rates temporarily deterring buyers, as we think, or the rising supply of existing homes on the market permanently diverting demand away from newbuilds.
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