In the month of June, sales of newly built single-family homes in the United States have seen a slight increase for the first time in three months, surpassing expectations. However, due to rising mortgage rates and ongoing challenges in housing affordability, the rebound in new home sales has been somewhat restrained, leading potential homebuyers to maintain a cautious attitude.
The U.S. Census Bureau reported on Friday, July 24th, that last month the sales of new homes in the United States increased by 1.6% compared to the revised data from May. The seasonally adjusted annual sales rate stood at 628,000 units, higher than the 607,000 units previously expected by economists surveyed by Bloomberg and the 610,000 units expected by economists surveyed by Reuters.
New home sales make up only a small portion of overall housing sales in the United States. The sales are calculated based on the number of contracts signed, rather than actual transactions like existing home sales, and monthly data tends to fluctuate significantly, often undergoing substantial revisions.
In comparison to the same period last year, new home sales in June this year decreased by 5.6%.
The report from the Commerce Department also revealed that the median sales price of new homes in June decreased by 2.7% compared to the same period last year, amounting to $398,300. This marks the fifth consecutive month of year-over-year decline in new home sales prices. The rebound in new home sales likely reflects the results of substantial price discounts and promotions by builders to stimulate market demand.
The inventory of new homes for sale last month showed little change compared to the previous month, standing at 485,000 units, but decreased by about 3% compared to the same period last year. At the current sales pace in June, this represents a supply of 9.3 months. In contrast, the supply in May was 9.4 months, and in June last year, it was 9.0 months.
However, despite builders offering discounted prices to boost new home sales, high borrowing costs continue to pose a major obstacle in the real estate market.
Matthew Martin, a senior U.S. economist at Oxford Economics, stated: “Rising mortgage rates and increased inflation impacting household incomes will keep sales fluctuating within a range in the short term and delay any sustained improvement.”
According to data released on Wednesday by the Mortgage Bankers Association, the average contract interest rate for conforming 30-year fixed-rate mortgages with loan balances up to $837,500 increased from 6.65% to 6.69% last week. This marks the highest level since August last year.
(Adapted from Reuters reporting)