That’s how many months in a row new home sales have dropped, underscoring a cooling in the red-hot housing market as buyers got pushed out by rising prices.
Sales of new single‐family houses fell 6.6% in June to a seasonally adjusted annual rate of 676,000, down from May’s revised rate of 724,000 and from 839,000 a year ago, the U.S. Census Bureau and Department of Housing and Urban Development said Monday.
The June figure missed a consensus forecast of 800,000, according to Moody’s Analytics, and came in below April’s revised 785,000 annual rate and March‘s 873,000. Even though the median price of a new home dropped in June to $361,800 from May’s $380,700, it is still up 6% from last year.
The housing market has been on fire during the last year as people working from home yearned for more space and took advantage of extremely low mortgage rates to snap up homes. But demand outstripped supply as builders slowed or paused their activity in the face of significant supply constraints for everything from land and labor to materials. That, coupled with homeowners being slow this year to list their homes, led to sharp price increases that pushed out buyers, especially first-time buyers.
Now, the home-buying frenzy appears to be over.
“The remarkable V-shape recovery in new-home sales has come to an end, as sales are back to their pre-pandemic pace,” said Bernard Yaros, an economist at Moody’s Analytics. “This shouldn’t be viewed as a defeat for the new-home market, but rather a normalization. The pace of sales over the past year was unsustainable, reflecting a confluence of onetime effects, including rock-bottom mortgage rates, unprecedented government income support, and heightened demand due to widespread remote work.”
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