Yesterday, a housing sales indicator in the usa fell to its lowest level since 2010. While on Thursday, another housing indicator climbed to its highest level since 2023. What exactly happened behind this?

According to data released on Thursday by the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales in September showed strong performance, reaching an annualized sales rate of 0.738 million units after seasonal adjustment. This is the highest level since May 2023, while the data for June, July, and August were also revised down.

This sharply contrasts with the data released by the National Association of Realtors on Wednesday, which showed a drop in existing home sales in September to the lowest annualized sales rate since 2010 after seasonal adjustment.

The significant difference between these two indicators is mainly due to the different sales statistics timing. Although both are based on September data, existing home sales are based on volume, while new home sales are based on contract signings.

Both types of data have their respective reference values. Because home sales under contract may be canceled before the transaction is completed, not all new home sales imply final delivery. However, it often takes one to two months from contract signing to completion, meaning that the Census Bureau's statistics can better reflect the housing market conditions of the month.

This report may bring some bullish signals to builders. The iShares U.S. Home Construction etf rose over 1%, exceeding the 0.21% increase of the s&p 500 index. The decline in the 10-year Treasury yield may also boost builders' stocks, as this yield is an important indicator of mortgage rate trends.

The differences in this data may also be related to the types of houses sold. After all, completing second-hand real estate transactions requires sellers to move elsewhere. The number of second-hand houses on the market has increased, but is still relatively low compared to historical standards. Especially for homeowners who obtained below 4% interest rates during the COVID-19 pandemic, these individuals lack the motivation to sell their houses.

In contrast, developers do not have the motivation to hold onto properties. According to data from the National Association of Home Builders, approximately one-third of developers have chosen to lower prices in the past few months, while over half have provided other incentive measures such as discounted mortgage rates. The median selling price of new homes in September remained unchanged from the same period last year, while the selling prices of second-hand homes rose by 3%.

The September new home sales data may indicate that lower mortgage rates have attracted some buyers to the market. According to data from the Mortgage Bankers Association, the mortgage rates at the end of September dropped to 6.08%, the lowest level since 2022, significantly down from the high point of 7.2% earlier this year. If this trend continues, the data for second-hand home sales may also see an increase in the coming months.

However, this downward trend in interest rates has not been sustained. The Mortgage Bankers Association's weekly mortgage rate report shows that this week, the 30-year fixed mortgage rate has risen to 6.54%, the highest level since August and the largest increase in four weeks since October 2023.

Sam Khater, Chief Economist at the Mortgage Bankers Association, stated in a press release: "The continued strong performance of the economy has once again driven up mortgage rates this week." The increase in September's new home sales data is undoubtedly an encouraging sign, but whether this growth can be sustained remains to be seen with the rise in mortgage rates once again.