August 25, 2025 • 8 mins
Sales of new US homes exceeded forecasts in July after an upward revision to the prior month, as prices eased and heavy incentives enticed more buyers off the fence. Contract signings on new single-family homes ticked down to a 652,000 annualized rate, with the strongest demand in the West, according to a government report issued Monday. The median estimate in a Bloomberg survey of economists was a 630,000 pace.
Katie Hubbard, Executive Vice President of Capital Markets at Walton Global, breaks down the American real estate landscape as market participants await the Federal Reserve's next interest rate decision in September. Katie speaks with Tim Stenovec and Norah Mulinda on Bloomberg Businessweek Daily.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg
Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Sales of new US homes exceeded forecasts in July after
an upward revision to the prior month, as prices the
east and heavy incentives enticed more buyers off the fence,
(00:24):
while sales did top projections. The new home market has
grown dependent on price cuts and incentives to get customers
amid high mortgage rates. Katie Hubbard watches this closely. She's
executive vice president of Capital Markets at Walton Global. It's
the privately owned asset and real estate investment company that
has more than four point five billion dollars of land
assets under management and administration in more than eighty thousand
(00:46):
acres under management and administration. She joins us from Denver.
Walton Global operates in retail, industrial, and commercial. Katie, you
were last on with us about a month ago. I'm
going to ask you the same question that I asked
you at that moment. Is the residential housing market better, worse,
or no different than when you were last on our program?
Speaker 2 (01:06):
Tim, thanks so much for having me I would say
that it is better. While prices are at four hundred
and three eight thousand, it is much more affordable to
buy a new home now than an existing home. And
we're starting to see investors really move into the new
home market. In fact, institutional investors reported last year they
were buying up about four percent of homes for our
builder clients, and now we're reporting twenty percent of homes
(01:28):
are going to institutional investors. That means that they see
the value in the new home prices while there's still
a pent up demand and just you know, high rates,
they know that buying now is going to be a
good investment for the long term for them.
Speaker 3 (01:43):
So what is driving that? Where are we seeing this
coming from? Especially since if you look at the SP
five hundred, real estate stocks are in the green so
far this year, but there's still one of the worst
performing industry groups on a year to date basis in
the S top five hundred.
Speaker 4 (01:56):
If you dig a little bit deeper.
Speaker 3 (01:57):
Into the home building index, they're on pace for their
best month since July of last year. So what's really
driving this demand here? Because if you think about the
average person, they would say that rates are too high.
Speaker 2 (02:09):
Right Norah, that's a great question. So you saw that
obviously recently, warm Buffett nodded to the industry with nearly
a billion dollars in investment in stock into this sector.
And it's really just the fundamentals that are driving this.
People need a place to live, and so if you
have the pent up demand, knowing that rates and I
think that just the macro looking at the macro rates
could be coming down and the demand is there, that
(02:31):
just boades well for the long term fundamentals. As far
as the stocks go, they're still trading really at a
great value, relatively low PE ratios, and so I think
that that's why investors are also looking at this as
a good long term fundamental play.
Speaker 1 (02:45):
So the remind everybody. We were talking about this on
the call, but it's like Walton Global not necessarily a
household name, but a lot of the firms that you
sell to are household names. Remind everybody about the space
you play in and then also what demand is looking
like from those customers.
Speaker 2 (03:01):
Absolutely, so Walton we land bank for public homebuilders, so
we're purchasing the land for them so that they can
keep it off their balance sheet, and that is just
not a fat or a trend, but that is an
ongoing future wave of the home building industry where the
large public homebuilders are doing extremely well because they're holding
land off their balance sheet, not tying up their cash.
They want to return sharehold directuity. They want to turn
(03:24):
their money two three, even maybe four times, and by
keeping land, which is obviously a piece that needs to
go into their formula, they just want to build and
sell homes, and so Walton is feeding the public homebuilder's land.
So what we're seeing is that the builders that are
doing the best are the ones that are able to
really scale their operations, build houses faster, build to the
(03:46):
demographic shifts, and lock in their land positions. They're doing
just fine. They do have to offer incentives to keep
the pace going, but they have you know, paceover price
right now and it's working for them.
Speaker 3 (03:56):
So of course you mentioned that you land bak for
public home builders. What's it like on the land side
when you are trying to get proper land from land owners.
Speaker 4 (04:05):
Is there a lot of opportunity there right now? Well,
it definitely is.
Speaker 2 (04:10):
Just like we look at these national numbers that come out,
it as very regional. So starts well starts for new
homes are up twelve point nine percent year over year.
Starts in Southern California are down thirty percent year over year,
and that's because insurance prices have gone through the roof.
For now, you've gone from three thousand per house to
seventeen thousand per house in some cases, just they make
(04:31):
it very difficult to get projects off the ground. They're
now requiring in some cases commercial sprinkler systems and residential homes.
That just doesn't make the numbers work. So Southern California
is on sale just because it makes it it's difficult
to get projects off the ground. You can get a
three bedroom house with sweeping views in Malibu for one
point four.
Speaker 1 (04:50):
Now just because how much? Because how much is insurance?
Is it because insurance insurance costs? It's uninsurable essentially, it's.
Speaker 2 (04:58):
Just because insurance costs have gone up and builders are
really shying away from all of the red tape that
you have to go through in that market. So land
it's it takes a long time where even we've we're
seeing fix and flippers go from you know, flipping homes
now they're actually taking down land positions and building homes
you can build one hundred and twenty five dollars a
square foot, sell it for two hundred and fifty dollars
(05:20):
a square foot. The numbers work, but that's not in
all markets. In Seattle and Portland, where it takes a
year to get your land zoned, you're just going to be,
you know, paying your lenders too much money to sit
on that land. So in places where it's easy, easier
to get zoning and they can go much faster, which
is the legal right to build on the land, like Texas,
Florida to the southeast, those land positions are really valuable.
Speaker 1 (05:42):
Ay very quickly to go back to Malibu because as
a California in my head is still spinning. This is
one of the areas of the world there is. The
real estate is the historically has been the most expensive.
Repeat the deals you can find in Malibu right now?
Speaker 2 (05:55):
Yeah, so sweeping views of the ocean, three bedrooms for
one point four.
Speaker 3 (05:59):
Million, Okay, Well, I want to quickly move over into commercial.
When we think about commercial real estate, everyone tends to
think immediately of office landlords. I cover public traded office rates,
and office reads only make up about three percent of reads.
More broadly, but what is the appetite, like, what is
the demand right now in terms of securing land for
(06:20):
commercial properties and offices more specifically.
Speaker 2 (06:24):
Yeah, I would say it is very choppy. And again
it's regional where you're seeing landlords that are still sitting
on fifty percent vacant. They're trying to repurpose, We're trying
to renegotiate with the banks. So if you can be
in the best location where the office is strong, which
is not in a lot of places across the country,
then those are going to be more more desirable.
Speaker 4 (06:46):
And what about other aspects of commercial real estate?
Speaker 2 (06:51):
Yeah, I mean I would say data centers. I mean,
we also own a lot of land where we're selling
to data center developers, and so that's clearly a hot topic.
And so we're, you know, trying to find the data
center numbers pencil, but you have to have the energy
and the zoning available to make those numbers work as well.
Speaker 1 (07:07):
When do you start seeing pushback from folks who are saying,
not in my backyard when it comes to these data centers.
I know we're already seeing that, But when does that
make building one of these just impossible?
Speaker 2 (07:18):
Yeah? I mean, at some point you just have to
keep going farther and farther out to where you're not
building near where it's going to be affecting people. So you,
you know, build farther out. In Texas, where Wolton owns
almost forty thousand acres of land, there's plenty of land
to build on for data centers where you're not going
to have that Nimbi mentality.
Speaker 1 (07:37):
Just twenty seconds. The most important place that investors should
look regionally right now when thinking about land.
Speaker 2 (07:44):
Yeah, I would say the Midwest and the Northeast are
performing the best as far as helpless appreciation and starts,
and the west northern California is really struggling.
Speaker 1 (07:52):
Okay, there it is. Katie Hubbard always love talking real
estate with you. Katie is executive vice president of Capital Market.
It's at Walton Global. It's the privately owned asset and
real estate investment company.
Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg
Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Sales of new US homes exceeded forecasts in July after
an upward revision to the prior month, as prices the
east and heavy incentives enticed more buyers off the fence,
(00:24):
while sales did top projections. The new home market has
grown dependent on price cuts and incentives to get customers
amid high mortgage rates. Katie Hubbard watches this closely. She's
executive vice president of Capital Markets at Walton Global. It's
the privately owned asset and real estate investment company that
has more than four point five billion dollars of land
assets under management and administration in more than eighty thousand
(00:46):
acres under management and administration. She joins us from Denver.
Walton Global operates in retail, industrial, and commercial. Katie, you
were last on with us about a month ago. I'm
going to ask you the same question that I asked
you at that moment. Is the residential housing market better, worse,
or no different than when you were last on our program?
Speaker 2 (01:06):
Tim, thanks so much for having me I would say
that it is better. While prices are at four hundred
and three eight thousand, it is much more affordable to
buy a new home now than an existing home. And
we're starting to see investors really move into the new
home market. In fact, institutional investors reported last year they
were buying up about four percent of homes for our
builder clients, and now we're reporting twenty percent of homes
(01:28):
are going to institutional investors. That means that they see
the value in the new home prices while there's still
a pent up demand and just you know, high rates,
they know that buying now is going to be a
good investment for the long term for them.
Speaker 3 (01:43):
So what is driving that? Where are we seeing this
coming from? Especially since if you look at the SP
five hundred, real estate stocks are in the green so
far this year, but there's still one of the worst
performing industry groups on a year to date basis in
the S top five hundred.
Speaker 4 (01:56):
If you dig a little bit deeper.
Speaker 3 (01:57):
Into the home building index, they're on pace for their
best month since July of last year. So what's really
driving this demand here? Because if you think about the
average person, they would say that rates are too high.
Speaker 2 (02:09):
Right Norah, that's a great question. So you saw that
obviously recently, warm Buffett nodded to the industry with nearly
a billion dollars in investment in stock into this sector.
And it's really just the fundamentals that are driving this.
People need a place to live, and so if you
have the pent up demand, knowing that rates and I
think that just the macro looking at the macro rates
could be coming down and the demand is there, that
(02:31):
just boades well for the long term fundamentals. As far
as the stocks go, they're still trading really at a
great value, relatively low PE ratios, and so I think
that that's why investors are also looking at this as
a good long term fundamental play.
Speaker 1 (02:45):
So the remind everybody. We were talking about this on
the call, but it's like Walton Global not necessarily a
household name, but a lot of the firms that you
sell to are household names. Remind everybody about the space
you play in and then also what demand is looking
like from those customers.
Speaker 2 (03:01):
Absolutely, so Walton we land bank for public homebuilders, so
we're purchasing the land for them so that they can
keep it off their balance sheet, and that is just
not a fat or a trend, but that is an
ongoing future wave of the home building industry where the
large public homebuilders are doing extremely well because they're holding
land off their balance sheet, not tying up their cash.
They want to return sharehold directuity. They want to turn
(03:24):
their money two three, even maybe four times, and by
keeping land, which is obviously a piece that needs to
go into their formula, they just want to build and
sell homes, and so Walton is feeding the public homebuilder's land.
So what we're seeing is that the builders that are
doing the best are the ones that are able to
really scale their operations, build houses faster, build to the
(03:46):
demographic shifts, and lock in their land positions. They're doing
just fine. They do have to offer incentives to keep
the pace going, but they have you know, paceover price
right now and it's working for them.
Speaker 3 (03:56):
So of course you mentioned that you land bak for
public home builders. What's it like on the land side
when you are trying to get proper land from land owners.
Speaker 4 (04:05):
Is there a lot of opportunity there right now? Well,
it definitely is.
Speaker 2 (04:10):
Just like we look at these national numbers that come out,
it as very regional. So starts well starts for new
homes are up twelve point nine percent year over year.
Starts in Southern California are down thirty percent year over year,
and that's because insurance prices have gone through the roof.
For now, you've gone from three thousand per house to
seventeen thousand per house in some cases, just they make
(04:31):
it very difficult to get projects off the ground. They're
now requiring in some cases commercial sprinkler systems and residential homes.
That just doesn't make the numbers work. So Southern California
is on sale just because it makes it it's difficult
to get projects off the ground. You can get a
three bedroom house with sweeping views in Malibu for one
point four.
Speaker 1 (04:50):
Now just because how much? Because how much is insurance?
Is it because insurance insurance costs? It's uninsurable essentially, it's.
Speaker 2 (04:58):
Just because insurance costs have gone up and builders are
really shying away from all of the red tape that
you have to go through in that market. So land
it's it takes a long time where even we've we're
seeing fix and flippers go from you know, flipping homes
now they're actually taking down land positions and building homes
you can build one hundred and twenty five dollars a
square foot, sell it for two hundred and fifty dollars
(05:20):
a square foot. The numbers work, but that's not in
all markets. In Seattle and Portland, where it takes a
year to get your land zoned, you're just going to be,
you know, paying your lenders too much money to sit
on that land. So in places where it's easy, easier
to get zoning and they can go much faster, which
is the legal right to build on the land, like Texas,
Florida to the southeast, those land positions are really valuable.
Speaker 1 (05:42):
Ay very quickly to go back to Malibu because as
a California in my head is still spinning. This is
one of the areas of the world there is. The
real estate is the historically has been the most expensive.
Repeat the deals you can find in Malibu right now?
Speaker 2 (05:55):
Yeah, so sweeping views of the ocean, three bedrooms for
one point four.
Speaker 3 (05:59):
Million, Okay, Well, I want to quickly move over into commercial.
When we think about commercial real estate, everyone tends to
think immediately of office landlords. I cover public traded office rates,
and office reads only make up about three percent of reads.
More broadly, but what is the appetite, like, what is
the demand right now in terms of securing land for
(06:20):
commercial properties and offices more specifically.
Speaker 2 (06:24):
Yeah, I would say it is very choppy. And again
it's regional where you're seeing landlords that are still sitting
on fifty percent vacant. They're trying to repurpose, We're trying
to renegotiate with the banks. So if you can be
in the best location where the office is strong, which
is not in a lot of places across the country,
then those are going to be more more desirable.
Speaker 4 (06:46):
And what about other aspects of commercial real estate?
Speaker 2 (06:51):
Yeah, I mean I would say data centers. I mean,
we also own a lot of land where we're selling
to data center developers, and so that's clearly a hot topic.
And so we're, you know, trying to find the data
center numbers pencil, but you have to have the energy
and the zoning available to make those numbers work as well.
Speaker 1 (07:07):
When do you start seeing pushback from folks who are saying,
not in my backyard when it comes to these data centers.
I know we're already seeing that, But when does that
make building one of these just impossible?
Speaker 2 (07:18):
Yeah? I mean, at some point you just have to
keep going farther and farther out to where you're not
building near where it's going to be affecting people. So you,
you know, build farther out. In Texas, where Wolton owns
almost forty thousand acres of land, there's plenty of land
to build on for data centers where you're not going
to have that Nimbi mentality.
Speaker 1 (07:37):
Just twenty seconds. The most important place that investors should
look regionally right now when thinking about land.
Speaker 2 (07:44):
Yeah, I would say the Midwest and the Northeast are
performing the best as far as helpless appreciation and starts,
and the west northern California is really struggling.
Speaker 1 (07:52):
Okay, there it is. Katie Hubbard always love talking real
estate with you. Katie is executive vice president of Capital Market.
It's at Walton Global. It's the privately owned asset and
real estate investment company.
Hosts And Creators
Tim Stenovec
Carol Massar
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