New Home Sales on a High
Temperatures were not the only thing on the rise this summer. According to CNN, New home sales rose in July from the month before, beating estimates and reaching a 17-month high, as buyers continue to look to new construction as an option in the face of a historically low supply of existing homes.
The US Department of Housing and Urban Development and the Census Bureau reported that sales for new homes were up 31.5% from the summer of 2022. Newly constructed home sales rose to 4.4% to a seasonally adjusted annual rate of 714,000.
Many are concerned that this might change due to the rise in home prices, and the rise in mortgage rates. In fact, existing home sales are down from Summer 2022. Those in the industry are not as concerned with new home sales.
“Household formation continues to outpace new construction which has continued to bolster the market despite the multitude of headwinds,” says Kelly Mangold of RCLCO Real Estate Consulting.
“With the median price of a new home running close to that of an existing home, many homebuyers are opting for the benefits of fresh floor plans, better energy efficiency and a warranty,” said George Ratiu, chief economist at Keeping Current Matters, a real estate market insights company. “Builders are bringing a growing number of new single-family homes to market, focused on meeting the needs of an affordability-constrained consumer.”
