Supply Constraints Impacted New Home Sales in May
According to estimates from the Census Bureau and the U.S. Department of Housing and Urban Development, the month of May experienced a decline of 5.9% for sales of newly-constructed single-family homes, which is a result of supply constraints amongst other issues.
The Census Bureau and the HUD found that the seasonally adjusted rate of home sales (which comes out to 769,000) was the lowest seen in a year. This comes despite numerous beneficial factors affecting the market, such as relatively low mortgage rates and a renewed focus on housing, especially in the suburbs and exurbs, by consumers.
According to an article by Robert Dietz for Eye on Housing, “higher building costs, longer delivery times, and general unpredictability in the residential construction supply-chain are having measurable impacts on new home prices.”
“In May, the median price of a newly-built home was 18% higher than a year ago, at $374,400. As NAHB has estimated, higher lumber costs alone are increasing new home prices by $36,000 on average,” Dietz added.
