New home sales rebounded in January despite rising mortgage rates. The most recent gains were not as strong as many had hoped, however, given the downdraft that we saw in December.
New home sales are a good lead indicator for the overall market because they are officially counted as soon as an offer is accepted; existing home sales are not counted until a sale closes. The data suggest that the housing market is weathering the rise in mortgage rates but may not be as resilient as hoped. The real test will be for sales from February through April, which will fully reflect any shift in demand related to higher mortgage rates and indicate how much we should credit anecdotal reports that purchases by immigrants are being shelved