As buyers are driven out of the current home market by a lack of available inventory, the market for new home sales for single families in the United States displayed even greater strength than anticipated in July.
In July, new home sales increased by 4.4 percent over the prior month to reach a seasonally adjusted annual rate of 714,000. That rate is the highest since February 2022, when the Federal Reserve first started hiking interest rates to combat the excessive inflation that has dogged the Biden administration.
According to Econoday, sales were projected to increase to 704,000.
New home sales are up 31.5 percent when compared to a year ago, when the market was shrinking due to concerns about an economic slowdown and the shock of aggressive Fed hikes that drove up interest rates on mortgages.
TThe median cost of a new home increased by 4.6 percent from $416,700 in June to $436,700. $513,000 was the average sales price.
According to data from the Commerce Department issued on Wednesday, sales of new single-family homes increased in the United States in July, exceeding economists' predictions. The following are the key lessons:
At the end of July, the seasonally adjusted estimate of new homes for sale was 437,000. This represents a supply of 7.3 months at the current sales rate, down from 7.5 months in June.
For the past 15 months, rising mortgage rates have had a negative impact on the housing market. The housing market was reportedly in a recession last year, according to many real estate experts.
The small number of available existing homes for sale has, however, helped to support the market for new dwellings. As their next property would require significantly higher interest rates of financing, many homeowners are choosing not to sell their homes that are now financed with cheap interest mortgages. These legacy mortgages are sometimes referred to as “golden handcuff” mortgages by real estate experts.