By coinnews 
00:00 Speaker A
New home sales surged 7.4% in March to an annualized rate of 724,000 according to the census bureau, that is significantly higher than the 1.3% increase that analysts expected. The beat largely driven by gains in the south, which rose to its fastest pace in nearly four years. Here with more analysis. We’ve got Lawrence Yun, chief economist at the National Association of Realtors. Lawrence, great to speak with you as always here. Just want to get your take, your analysis on what we’re seeing play out in some of the data and and whether or not it’s sustainable.
00:58 Lawrence Yun
Uh well, you know, the new homes market, uh the newly constructed homes is fairly smaller size compared to all home sales, generally about 10 to 15%, but the builders, builders are putting up more smaller size home that is within the price points, uh and furthermore, uh the inventory availability, eight months supply, that is the metric that the housing industry analyst would be looking at. Well, generally four to five months would be considered equal, uh but right now eight months means builders have plenty for inventory. They’re providing some incentive for the buyers to come into the market. So this gain, latest gain is on top of the two consecutive annual gains in 2023 and 2024.
02:22 Speaker A
And so with that in mind, where are we seeing the most demand in terms of the the buyer spectrum, if you will? Is it a lot of new first-time home buyers that are entering into the equation or is this kind of new or repeat, I should say, home buyers that are trying to kind of level up?
02:58 Lawrence Yun
Uh right now, we have seen more of the existing homeowners who have seen sizable wealth gain by being homeowners, price appreciation, using that price appreciation to go into their next home. So the south region, uh we have seen the general trend of people from the northern states or say from California wanting to move to the southern state. Uh so this trend is continuing. Moreover, if one looks at the employment data, all the job creation is principally happening in the southeastern states, along with Texas, then you have Arizona and the Rocky Mountain states. So where there is a strong job growth, one should naturally anticipate that’s where the potential housing demand is strongest, and it looks like it’s been realized in the latest month.
04:17 Speaker A
You know, with this in mind, the the administration, the Trump administration has been laser focused on that 10 year and trying to pressure the Fed to take action in order for the 10 year to come lower, and that typically has some type of implication as well for the housing market, as that’s most closely correlated to mortgage rates as well. What are you watching closely for for how the Fed policy for the rest of this year could also be a direct corollary for the housing market?
05:11 Lawrence Yun
You know, the Federal Reserve has indicated that will be on pause, but the mortgage rate is not a one-to-one relationship with the Federal Reserve. It’s more related to the 10-year Treasury. So 10-year Treasury indicating the global bond market condition. If the uh people feel comfortable owning US backed government bond, then it makes the 10-year yields little lower, makes the mortgage rates little lower. So uh it will be very welcoming thing uh to say to the global, and you know, America is always provided that the solid foundation, safest asset uh in the world. Furthermore, real estate, you know, foreigners can come to the country, buy real estate knowing that uh there would not be a confiscation of the property. So we, America has always enjoyed the global attraction, and the treasury yield going down today, that is a very welcoming news uh indicating that uh in times of uncertainty, people want to seek out either tangible asset in gold, perhaps real estate, or in the US treasury.
06:51 Speaker A
And while we have you, I I wonder what you’re making of the early innings of the spring home buying season and what that’s spelling out for some of the forecasts that we had coming into the start of this year.
07:14 Lawrence Yun
Uh you know, the existing home market is the larger market share. So in the existing home sales, the pending contracts has struggled through lack of inventory, clearly hindering some of the uh activity, but as we saw in the builders data today, along with mortgage purchase application, that is to say how many Americans are applying for mortgage to buy a home, and it is up 5% year to date. So there is a desire to get into the market. I think people are just looking for that right home to appear in the market. So as we see more inventory growth, we are seeing a little bit of growth in the existing home market, but I would like to see much more substantial growth and lower mortgage rate. That is the magical power to get the housing market moving. So once the 10-year treasury mortgage rate comes down meaningfully, uh there could be a rush of buyers and sellers coming into the market.