Construction will be carried out nearby in Austin, Texas on April 17, 2025.
Brandon Bell | Getty Images
Sales of new single-family homes fell 13.7% in April on a seasonally adjusted annual basis in April, according to the US Census.
This total sales were 6.3% lower than May 2024, far below the six-month average of 671,000 and the annual average of 676,000. It also slowed the pre-pandemic average of 685,000 units sold in 2019.
Dow Jones estimates Wall Street analysts were hoping to sell 695,000 new homes.
Because this count is based on a signed agreement, some people shop in May when mortgage rates remained stubbornly high.
According to Mortgage News Daily, the average rate for a 30-year fixed mortgage started at 6.83%, steadily rose above 7%, and by the end of the month it had settled at 6.95%.
“The huge drop in new home sales in May serves as a valuable reminder that with cancelling all positivity over the past few months and having a mortgage rate of 7%, it’s only going up so far,” writes Bradley Saunders, economist in capital economics.
Home builders reporting quarterly revenue recently pointed to higher rates that have been reduced to affordable prices.
“While mortgage rates remain high, the macroeconomics remains challenging as consumer trust is challenged by uncertainty both domestically and globally,” he said. Renalin a call with analysts after the company’s second quarter revenue release. “Beyond the residential landscape, it continues to soften as practical demand is reduced due to both affordability and consumer trust.”
Lennar reported a price cut KB Homereported quarterly revenue this week and raised prices.
According to a census report, the median price of new homes sold in May was $426,600. This is 3% above the annual price.
As sales slowed, supply increased significantly. At the end of May, 507,000 new homes were available for sale. This represents 9.8 months of supply at current sales rates, 15% higher than May 2024.
Finally, the supply was temporarily high in the summer of 2022, after the Federal Reserve first began raising interest rates after gross revenue. Before that, supply had not been this high since 2009 amid the subprime mortgage crisis and the Great Recession.
