New Home Sales Are Still Climbing

 The New Year started off right when it came to new home sales as they rose 7.2% from December 2022 according to the US Census Bureau and the Department of Housing and Urban Development. This makes the seasonally adjusted annual pace at 670,000 homes. This is great news but is still down 19.4% on a year-over-year basis.

“January marked a surge of people signing contracts to buy new homes. The increase in contract signings can be attributed to a decline in mortgage rates in January after a run-up in rates in October and November. Rates have bounced higher since January, which likely is acting as a drag on new home sales in the meantime,” according to Holden Lewis with NerdWallet.

“The backlog of new construction homes continues to emerge into the market just in time for the spring shopping season. Many home builders are offering incentives to buyers sweetening the deal just enough to bump sales from the month prior,” said Nicole Bachaud, Zillow’s senior economist.

This caused a price drop which landed the median new home sales price to drop to $427,000 in January 2023. As far as the different regions, the sales price on a month-over-month basis was down 25,000 homes in the Northeast, 67,000 homes in the Midwest and 127,000 homes in the West. The South had jumped 17.1% to 451,000 on a monthly basis and the West was the largest drop at 46.9%

“There is still a large chunk of new construction homes currently under construction, and when those homes hit the market, especially over the next few months, we will see spring home buyers – those who can afford the higher new construction price tags- having more options and opportunities to break into homeownership,” says Bachaud.

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New Home Sales Are Bouncing Back This Fall

New Home Sales Are Bouncing Back This Fall  1

 Even with the rising home prices and mortgage rates, new home sales have bounced back.  The US Department of Housing and Urban Development along with the US Census Bureau reports that the sales of newly constructed homes have risen 28.8% from this summer.  It was reported that 685,000 new homes were sold in August 2022 which was up from July’s report of 532,000 and down slightly from a year ago with 686,000 newly constructed homes.

The median home price for a new home did slip to $436,800 from $439,400 the previous month.  Prospective buyers are not happy with the huge stretch in their budget, the long construction wait times and the rising mortgage rates.  The average interest rate for a 30-year fixed rate did dip just below 5% in August but is still high compared to the 3.22% we saw in January.

“New homes blew through estimates for August, but it’s likely an aberration caused by a dip in mortgage rates earlier in the summer. The good news is price increases for new homes continue to cool which points to a more reasonably-priced housing market starting as soon as next year,” said Robert Frick, corporate economist at Navy Federal Credit Union.

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Post settings Labels home prices, prices, price, Urban, US Census, houses Published on 10/29/22 8:00 PM Permalink Location Options Creating new post...