New-home sales grew 4.4% in July to a rate of 714,000, reversing course from June’s 2.5% drop, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development. The pace of new-home sales also went up, coming in 31.5% higher from a year ago.
“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 homeowners electing to stay put to preserve their low mortgage rates,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Alabama. “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.”
New single-family home inventory registered at 437,000 at the end of July, up 4.8% compared to a year ago. This represents a 7.3 months’ supply at the current building pace. Additionally, of the total home inventory, 31% of homes available for sale are newly built.
Regionally, the Northeast and the South were down by 2.9% and 6.3%, respectively. Meanwhile, the Midwest and West shot up by 47.4% and 21.5%, respectively. Year-over-year, the Northeast, Midwest and South were up by 5%, 1% and 3.5%, respectively, while the South was down 8.1%.
As for home prices, the median sales price of new houses sold was $436,700, down about 9% year-over-year. The average sales price was $513,000.
“Despite this monthly uptick, new-home sales will likely weaken in August as higher interest rates price out prospective buyers,” said NAHB Chief Economist Robert Dietz. “Mortgage rates increased from 6.7% at the start of July to above 7% in August.”
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