17% decline in new home sales, easing fear of overheating

  • Sales of new homes fell to 591,000 units a year in April, according to the U.S. Census Bureau.
  • It fell below the average estimate of 750,000-home speeds and is the slowest rate in two years.
  • Housing affordability has been reduced by 2022 due to mortgage rates and record-high prices.

Sales of new homes in the United States fell to a two-year low in April as buyer demand clashed with rising mortgage rates and skyrocketing selling prices.

Sales of new single-family homes fell to a seasonal adjusted annual rate of 591,000 units, down from April. U.S. Census Bureau Said Tuesday morning. It fell below the 750,000-pace economic forecast and reflected a recession of almost 17% from the previous month’s rate.

Sales momentum after April 2020 is now slow, with corona virus outages and widespread locks restricting activity across the U.S. economy.

New home sales in March revised up to 709,000 units from an initial rate of 763,000 units.

The report provides an early indication that the buying frenzy that boosted the home market throughout the epidemic may soon lose momentum. Sales began to slow in 2021 for Americans against the rapid growth of home prices over decades. The price rise is strong until 2022, which offers little relief to buyers trying to find a deal.

Rising interest rates have also put pressure on demand. The


Federal Reserve

It has raised interest rates twice this year in an effort to reduce demand and reduce inflation. Those rate hikes push up borrowing costs across the economy, including higher mortgage rates. Home loans now They have been the most expensive since 2009Affordable prices in the housing market are further eroding.

“Affordability is a growing challenge as higher new home prices and rising mortgage rates are determining the price of some buyers,” Otoda Kushi, the first U.S. chief economist, told Insider. “A year ago, 25% of new home sales were below $ 300,000. In April of this year, only 10% of new home sales were below $ 300,000.”

As prices rise, Millions of home buyers Pricing is done outside the market – especially for first-time home buyers in the United States. According to a study by DT Bank, the population is most intimidated by the right to housing.

DT Bank Calculated More than 1,000 hopeful buyers and 29% found that they were unsure whether this was a good time to buy a home. Although 67% of participants cited it as a concern, 46% said they would save


Advance

Was the biggest obstacle to home ownership.

“Low inventory, steep competition and high prices in many parts of the United States create fear for buyers and make it even more difficult for first-time market entrants,” the researchers wrote.

Overall, according to TD’s survey, only 36% of prospective home buyers this year believe that now is a good time to buy – a steep decline from 59% in 2021 and a “dramatic fall” from 2020, 68% of prospective buyers said. Good time to buy a house.

The report on Tuesday says that distrust is finally entering market action. As buyers are more cautious in the market no speculation a Home bubble Relax – especially if the need is cold.

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