New Home Sales Increase in July Despite Higher Mortgage Rates
Inventory is low, it’s been low, hence the solid demand from potential homebuyers. This coupled together has offset high mortgage rates and construction costs, boosting new home sales last month.
Newly-built, single-family home sales rose 4.4% to a 714,000 seasonally adjusted annual rate, from a downwardly revised reading in June, in July, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Up 31.5% from a year ago, the pace of new home sales is on the rise.
“New home sales were solid in July because of an ongoing housing deficit in the U.S. and a lack of resales stemming from many home owners electing to stay put to preserve their low mortgage rates,” said National Association of Home Builders (NAHB) Chair Alicia Huey. “But builders are still confronting many challenges, including rising mortgage rates, supply chain issues for electrical transformers, a dearth of skilled workers and elevated construction costs.”
According to NAHB, new single-family home inventory in July was 437,000, up 4.8% compared to a year ago. This represents a 7.3 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Of the total home inventory, including both new and resale homes, 31% of homes available for sale are newly built.
