Across the U.S., sales of single-family homes declined 4.7% to a seasonally adjusted rate of 634,000 in April, and overall sales were down 7.7% year-over-year, too, according to data released by the U.S. Census Bureau.
Delving deeper, the median sales prices of new homes sold in April was $433,500, down 1.4% from March, though still up 3.9% from a year ago. The average sales price of new homes sold last month was $505,700.
Additionally, new single-family home inventory remained aloft in April at 480,000, still up 12.1% from a year ago, representing 9.1 months’ supply at the current building pace.
“As the inventory of existing homes has increased, homebuyers have choices and demand for new construction has cooled slightly,” said Bright MLS Chief Economist Dr. Lisa Sturtevant. “We can also see the inventory of unsold new construction also building up. At the end of April, the new home inventory was 12.1% higher than a year ago, the biggest year-over-year supply gain since December 2022.
“At the same time that supply is starting to increase, demand is being challenged by 7% mortgage rates and affordability ceilings,” she continued. “Homebuilders have been offering concessions and building smaller homes in response to the tight conditions some homebuyers are facing.”
As mortgage rates have remained mostly unchanged in recent weeks, homebuyers have stayed cautious in making purchases, leading to a lower rate of home sales overall. But Carl Harris, chairman of the National Association of Home Builders (NAHB), believes that rates will change in the coming months.
“The last four weeks mortgage rates have been above 7% and this is clearly causing many potential homebuyers to sit on the fence,” he said. “However, in the weeks and months ahead, we expect mortgage rates to fall below 7%. Moderating rates, along with a dearth of existing inventory, should help new home sales recover as new construction will be needed to meet the demand for homes, especially during this crucial spring/summer season.”
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