Published by FOX Business | May 24, 2022
Sales of new single-family houses in the U.S. dropped significantly more than expected in April to the lowest level in two years.
Sales of new single-family houses in the U.S. dropped significantly more than expected last month to the lowest level in two years as rising construction costs, home prices, interest rates and supply chain woes continue to batter the industry.
The U.S. Census Bureau’s latest data shows the pace of new home sales fell by 16.6% in April from the month before at a seasonally adjusted rate of 591,000. Analysts surveyed by Refinitiv anticipated a dip of 1.7%.
The drop is 26.9% lower than a year ago, and the lowest since April 2020. This is the fourth straight month new home sales have declined.
“April’s dismal new home sales data shows an industry besieged by higher construction costs, supply chain disruptions and by higher mortgage rates that are giving many potential buyers cold feet.”
–Robert Frick, corporate economist at Navy Federal Credit Union.
“Given the pipeline for bringing new homes to market is stretched so thin, we shouldn’t expect home building to add much to housing stock for the foreseeable future,” he added.
The Census Bureau reported that the median sales price of new homes hit $450,600 last month. With interest rates now upward of 5%, the rising cost of homeownership is pricing more would-be buyers out of the market.