New home sales rose in July as prices hit a new high, according to data released Tuesday by the Census Bureau.
Sales of new single-family homes rose 1% in July to a seasonally adjusted annualized rate of 708,000, from 701,000 in June. The median selling price of a single-family home rose to $ 390,500, and the average price hit $ 446,000 – each a new record.
“Despite house prices soaring to record levels, new home sales posted a slight gain in July,” Oxford Economics’ Nancy Vanden Houten wrote in an analysis Tuesday.
“While demand for new housing remains strong, high prices and construction delays will moderate sales in the coming months,” she added.
An increase in demand for new homes triggered by the coronavirus pandemic has driven sales and prices to staggering levels in 2020. Sales cooled slightly this spring as prices continued to rise, but a serious shortfall inventory and backlogs of construction supplies kept costs down for new tall houses.
The inventory of new homes for sale rose 5.5% to 367,000 in the fastest month-to-month increase since November 2008, wrote Vanden Houten, but construction has yet to start on a record. of 29% of these homes.
âThe need to reduce these arrears should support the construction of new homes in the coming months, even if the pace of sales remains moderate,â she wrote.
The housing stock was already depleted before the coronavirus pandemic blocked construction and worsened the backlog. While rising home prices have been a boon to homeowners, it has also left millions of potential buyers out of the market and unable to afford newly expensive homes.