September 2023 Residential Sales and Homebuilder Earnings

Strong home sales in September. The annualized sales rate in September was about 759,000. This is back up above the pre-Covid sales level. Homes for sale continues be relatively stable. Figure 1 shows the standard measures.

Figure 1

I would have expected a boost in homebuilder stock prices, since the popular expectation seems to be that high mortgage rates are going to kill new home sales. They haven’t moved much. I guess the extra half point rise in rates since September is finally the rate spike that will hurt sales, so strong sales in September didn’t allay fears. In the meantime, equity in the cheaper builders continue to be on discount.

More below the paywall.