Rising inflation, sticker shock and economic uncertainty all pushed U.S. new home sales to their lowest level since April 2020, reflecting weaker builder sentiment as bottlenecks Construction strangleholds continue to slow new home construction and drive up housing costs.
Sales of newly built single-family homes in June 2022 fell 8.1% to a seasonally adjusted annual rate of 590,000 from a sharply lowered reading in May, according to data recently released by the department. US Housing and Urban Development and the US Census Bureau. . New home sales are down 13.4% in 2022 year-to-date.
“Builders have seen their sales decline significantly as buyers are shut out of the market due to higher interest rates and ongoing home construction and development costs, including building materials,” said Jerry Konter, president of the National Association of Home Builders. “This is only the second time new home sales have fallen below an annual pace of 600,000 since October 2018, and this latest report also reflects a sharp decline in builder confidence, as reported in our latest report. investigation.”
“Buyers are balking due to deteriorating accessibility conditions and growing sticker shock,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “Only 14% of new home sales in June were priced below $300,000. A year ago it was 27%. Meanwhile, inventory levels are high and will contribute to lower production in the short term as the market finds a new equilibrium.”
A new home sale takes place when a sales contract is signed or a down payment is accepted. The house can be at any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, June’s reading of 590,000 units is the number of homes that would sell if this pace continued over the next 12 months.
Inventory of new single-family homes remained high at 9.3 months of supply, up 60.3% from a year ago, with 457,000 available for sale. However, only 39,000 new homes are completed and ready for occupancy. The others have not started construction or are currently under construction.
The median sale price fell to $402,400 in June, down 9.5% from May, but up 7.4% from a year ago.
Regionally, year-to-date new home sales have fallen in all four regions, down 12.1% in the Northeast, 24.8% in the Midwest, 12.6 % in the South and 9.6% in the West.