Morning! This is MF Lending - the fool-proof way to serve up mortgage and real estate market knowledge without any of the guesswork. So you’ll look like the smartest agent in the room (and you are!)

Here’s what we’ve got for you today:

1. Buyers are choosing new homes vs existing homes July report shows 🏡

2. Rates fell briefly yesterday - why? 📸

3. Better.com goes public 📺

By the way, this article on HousingWire’s analysis of the market is the most clicked link in this newsletter, you should check it out if you are interested.

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Rates Today 📉

Buyers are choosing new homes vs existing homes July report shows 🏡

New homes sales report for July was released on Wednesday, here are the highlights (graphs provided by MishTalk):

• New home sales rose 4.4% in July to 714,000. This is up 31.5% above July 2022

• The median sales price of new homes sold was $436,700

• Average sale price was $513,000

• The months of supply decreased in July to 7.3 months from 7.5 months in June. This is above the top of the normal range (about 4 to 6 months of supply is normal).

  • The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020

Interestingly, existing-home sales were down 2.2% month-over-month. Marking 16 of the last 18 months of decline.

This tells us two things:

1. Builders are offering massive incentives for new buyers

2. The lack of existing inventory is pushing buyers to new builds

Builder Incentives

This charge is led by the elevated mortgage rates pricing out many homeowners.

Many builders are offering massive incentives to buyers to buy down discount points, pay for closing costs, add property upgrades, etc. I have seen offers up to 25k in incentives…that covers all the closing costs, two discount points, and a pizza to eat on the floor when you move in.

If you are a listing agent and you have a listing hitting the market, your seller may consider mirroring incentives like these if they really want to get the house moved.

Lack of Inventory

Existing home sales are also stifled by the lack of inventory. As we have talked about several times, the “lock-in effect” is in play here. Homeowners are not parting with their homes currently leaving few houses for sale in the existing-home market.

Rates fell briefly yesterday - why? 📸

If you saw my Instagram story yesterday, you would have seen that there was a massive positive swing (+65bps) in interest rates yesterday after nearly two weeks of rising rates.

The leading driver of this charge was the PMI data from the EU.

Opening the day today, we are seeing the bond market down once again, so it was a short-lived dip.

All the more reason to follow us on Instagram to get real-time updates so you know when buyers can get real savings.

Better.com goes public 📺

The Cul-de-Sac

Thanks for reading - that is all we have for today 😎

Please forward this to your friends and colleagues if you found it valuable.

— Michael F DiLucchio