MORTGAGE NEWS
2024Issue7 BuildersOutlook
5
MORTGAGE NEWS
New Home Sales Soft as Mortgage Rates Remain Near 7 %
Elevated mortgage rates continue to keep buyers on hold , as new home sales remained relatively flat in June . Sales of newly built , singlefamily homes in June fell 0.6 % to a 617,000 seasonally adjusted annual rate from a slight upwardly revised reading in May , according to newly released data from the U . S . Department of Housing and Urban Development and the U . S . Census Bureau . The pace of new home sales in June is down 7.4 % from a year earlier and is the lowest pace since November 2023 . “ Many potential buyers are remaining in a holding pattern due to elevated mortgage rates that averaged near 7 % in June ,” said Carl Harris , chairman of the National Association of Home Builders ( NAHB ) and a custom home builder from Wichita , Kan . “ However , moderating inflation suggests lower interest rates in the months ahead and that should bring more buyers off the sidelines .”
“ Though new home inventory in June remained elevated at a 9.3 months ’ supply at the current building pace , there is still a long-run need for more construction because existing inventory remains relatively low ,” said Jing Fu , NAHB director of forecasting and analysis . “ Due to a lack of resale homes for sale , the combined inventory for new and existing single-family homes remains lean at a 4.7 months ’ supply , according to NAHB estimates .”
A new home sale occurs when a sales contract is signed , or a deposit is accepted . The home can be in any stage of construction : not yet started , under construction or completed . In addition to adjusting for seasonal effects , the June reading of 617,000 units is the number of homes that would sell if this pace continued for the next 12 months .
New single-family home inventory in June remained elevated at a level of 476,000 , up 11.2 % compared to a year earlier . This represents a 9.3 months ’ supply at the current
building pace , which has been supported by the ongoing shortage of resale homes . Of the new home inventory , 102,000 are completed ready-to-occupy homes , up 50 % year over year . This segment represents 21 % of total inventory . The median new home price was $ 417,300 , up 2.5 % compared to last month , and remained essentially flat compared to last year Regionally , on a year-to-date basis , new home sales are down 5.5 % in the Northeast and 6.7 % in the South . New home sales are up 25.5 % in the Midwest and 5.7 % in the West .
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