US new home sales for July declined 12.6% month-over-month to a seasonally adjusted annual rate of 511,000 units (consensus 580,000) from a downwardly revised 585,000 (from 590,000) in June. On a year-over-year basis, new home sales were down 29.6%. The median sales price increased 8.2% yr/yr to $439,400 while the average sales price jumped 18.3% to $546,800. as higher mortgage rates and higher prices pressured affordability even more for prospective buyers.
US new home sales for July 2022
- New home sales declined 12.6% month-over-month in June to a seasonally adjusted annual rate of 511,000 units (consensus 580,000) from a downwardly revised 585,000 (from 590,000) in June.
- On a year-over-year basis, new home sales were down 29.6%.
- The median sales price increased 8.2% yr/yr to $439,400 while the average sales price jumped 18.3% to $546,800.
- At the current sales pace, the supply of new homes for sale stood at 10.9 months, versus 9.2 months in June and 6.0 months in July 2021. A six-month supply is typically associated with a more balanced market.
- The percentage of new homes sold for $399,999 or less accounted for 39% of new homes sold versus 47% in June and 48% one year ago.
New home sales month-over-month/year-over-year by region:
- Northeast (+13.3%/-37.0%);
- Midwest (-20.6%/-22.9%);
- South (-12.1%/-20.8%);
- West (-13.3%/-50.3%).
Note new home sales in the West (which has the highest concentration of higher-priced homes) were down 13.3% month-over-month.
The report confirms the effect of rates and new home sales remain concentrated in higher-priced homes, as inflation pressures, pushed by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
The big question is after the surge in rates and slash in rates how much damage has been done with the massive wealth erosion.
Source: Census.gov
From The TradersCommunity News Desk