New Homes Sales in Jan FALL
The National Association of Realtors released its January New Home Sales and not surprisingly they FELL short of Bloomberg expectations as long-term interest rates rose. They missed by 10% (593,000 vs 640,000) and even fell 8% vs prior months 643,000. The use of leverage in the global economy in past decades tied to low rates has left demand highly sensitive to interest rate changes as new home sales figures demonstrate. We caution what will occur to demand in housing if rates rise further.