2024-05-06 12:43:14
Sales of new homes, which make up a tenth of the market, jumped 8.8 percent last month, according to government data. and, adjusted for seasonality, totaled 693,000 per year. That beat economists’ forecast of 670,000 and was the biggest monthly gain since 2022, a FactSet poll showed. December. New home sales were up across the country last month, with the Northeast region seeing the biggest increase of 27.8 percent compared to February.
The housing market will remain difficult
Sales of existing homes, which make up the majority of the housing market, fell by 4.3 percent in March. up to 4.19 million seasonally adjusted annual rates, the biggest drop in more than a year, the National Association of Realtors said last week.
CNN reports that economists believe the US housing market will continue to be tough for Americans, and that mortgage rates will remain well above 6% this year. The Federal Reserve does not directly set mortgage rates, but its actions influence them, and the central bank is not expected to cut rates anytime soon.
The main point of pressure in the market remains the permanent insufficient supply of housing, which leads to low affordability. Home buyers also have limited options.
“Despite high prices and high mortgage rates, homebuyers have limited options in the resale market, although resale inventory has improved somewhat this year,” said Gregg Logan, managing director of RCLCO Real Estate Consulting.
Stalled housing market recovery?
The housing market saw some momentum at the start of the year as home sales surged, homebuilder sentiment improved and inventory levels rose, but that now appears to have faded.
According to the previously published data of the Department of Commerce, not only the sales of existing houses, but also the construction of single-family houses decreased in March – by 12.4 percent. Residential construction declined across the country, except in the West. At that time, the number of permits to build future constructions fell by 3.7 percent in March. and hit a five-month low.
Data from the National Association of Home Builders showed that in April, 22 percent builders reduced housing prices compared to 24 percent. in March. The share of builders offering sales incentives decreased from 60 percent. March. up to 57 percent in April Homebuilders sentiment in the US remained stable in April.
“April’s data shows there is potential for demand growth, but buyers are holding off until they get a better idea of where interest rates are headed,” Robert Dietz, chief economist at the National Association of Home Builders, said in a statement.
Prepared according to information from CNN.
2024-05-06 12:43:14