U.S. Census Bureau and the U.S. Department of Housing and Urban Development says New-Home Sales Plummet In April, Falling To Lowest Level In Two Years

New home sales

According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, April’s annual sales pace is down 16.6% from the revised March rate of 709,000 units and 26.9%. In April, the drop in new-home sales was the fourth consecutive monthly dip and the second consecutive month with a double-digit percentage-point drop. When combined with recent reports of low single-family construction activity and persistent existing-home difficulties, April’s data fuel the fire of dwindling homebuyer desire amid rising mortgage rates, low inventory, and still-high prices.

The volume of signed sales contracts significantly declined in April as the cost of purchasing a home increased in 2022 as interest rates surged higher,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB). “Higher construction costs fueled by rising material prices and supply-side constraints and limited existing-home inventory are pricing many potential homebuyers out of the market.” Read More

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The Crazy Housing Market Is Finally Slowing Down. National Association of Realtors, said that new home construction had increased the housing supply.

Housing market

After nearly two years of skyrocketing prices and dwindling inventories, the housing market is starting to cool this spring. As per Zillow, inventories are rising fast enough to close the gap with available houses in 2021 and should surpass last year’s stock by 2022. Homebuyers and renters who have been unable to locate an affordable place to live will have more options and, perhaps, fewer bidding wars. This will take time to come to fruition, but the signs of improving inventory are there.

According to Tucker of Zillow, the cooling is not a hint of a housing crisis but rather a sign that the market will revert to a more balanced state. While prices aren’t likely to start falling quickly, they will no longer be growing as swiftly.

Lawrence Yun, a chief economist for the National Association of Realtors, said that new home construction had increased the housing supply. However, he believes that continuous inflation and external concerns such as the Ukraine conflict will continue to pressure potential purchasers. Read More

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Housing Supply Improving, As High Prices and Rising Rates Weigh on Sales. Mortgage applications up for the second week this year

Housing supply improving

According to new data from Realtor.com, the supply of properties for sale could expand in the coming weeks. Inventory was down 12% in April compared to the same month last year, the smallest year-over-year drop since 2019. The change in supply is most likely due to a slower sales volume caused by the recent abrupt spike in mortgage rates, which has made already expensive properties considerably more costly.

Some areas of the country already see more homes coming on the market. As well, traffic at open houses has declined. The likelihood of home prices experiencing a significant drop remains low due to the fact there is still considerable demand. However, bidding wars for homes are decreasing in many markets. This could be the beginning of the market adjusting to a more balanced relationship between buyers and sellers. Read More

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