Commerce Department data showed Tuesday, that sales of new homes in the U.S. plunged 8.1 percent to a seasonally-adjusted annual rate of 590,000 in June, a far slower pace than expected by economists.
Additionally, the Commerce Department revised down its estimate for prior months, meaning that sales grew by 6.3 percent compared with the initial estimate of a gain of 10.7 percent. May sales figures were revised down from 696,000 to 642,000, indicating the market was already much more sluggish than previously thought. Figures frequently get revised, as new home sales data can be volatile, especially when interest rates are changing.
According to Econoday, economists had expected an annual sales rate of 676,000 for June, however the June figure represents a 17.4 percent decline from a year ago.
Declining median sales prices for the past three months, may indicate that new home prices peaked this spring just as the Federal Reserve began to hike interest rates. A decline from May’s $449,000, the median sales price of a new home sold was $402,400, down from April’s record high of $457,000.
At the current sales rate, there is a 9.3-month supply of homes, considered a large amount of unsold homes on the market. Additionally, the supply of new homes jumped by 10.7 percent in June from May.
Interest rate hikes, by the Federal Reserve, have cooled down what was a blazing hot housing market. This is one of the primary ways the Fed’s tightening of monetary policy works. Though a year ago, the average interest rate was 2.87 percent, on average a 30-year fixed-rate mortgage was 5.52 percent in June and has been around 5.45 percent in July. This is a significant difference, in making a mortgage commitment, especially because you can buy less with the higher cost to borrow money. Another real time benefit of Bidenflation. What a difference 18 months has made.
On Tuesday, the S&P CoreLogic Case-Shiller 20-city index, showed home prices were up in May 20.5 percent compared with a year ago, a deceleration from the 21.12 percent gain reported in April. The index, when compared with the prior month, was up 1.3 percent, also slower than the 1.7 percent gain reported in April.
Also released Tuesday, the Federal Housing Finance Agency’s report on home prices, showed a 1.4 percent month-over-month gain and an 18.3 percent annual gain.
Housing sales are slowing, as buyers are looking to the economy and showing restraint on the huge commitment necessary in purchasing a home. Interest rates on the rise, also makes consumers think twice especially with Bidenflation driving the simple costs to live through the roof.
Figures are due out soon measuring how far into a recession we will be plunged – despite the spin, Biden and his administration are already scrambling to seed though his complicit media outlets.
“You won't have long to wait. Strap yourself in - it's going to get bumpy. Well, bumpier than it has been.”
-Mike, Breitbart Blogger
AND
“Out of control inflation, high interest and $80 for a sheet of plywood will have an effect on the new housing market. Not to mention property taxes on that inflated home value. Another Biden failure”
-Gman, Breitbart Blogger
“Unite liberality with a just frugality; always reserve something for the hand of charity; and never let your door be closed to the voice of suffering humanity.”
-Patrick Henry