Read more: Housing starts surge despite mixed economic signals
While the months’ supply dropped modestly to 7.3 months, the estimated number of homes for sale jumped 11.3% to an all-time high of 108,000 – suggesting that housing starts could continue to increase over the coming months if strong demand persists. The number of completed homes for sale grew 8.7% to 75,000, the highest level since April 2020, according to the report.
“The July report was in line with our expectation for new home sales; however, given that mortgage rates have again risen above 7%, we believe the risk to new home sales is to the downside,” Fannie Mae chief economist Doug Duncan said. “Of course, this may be partially offset as a rise in completed inventories may lead builders to offer more generous concessions to bolster demand.”
New home prices posted significant declines in July due to builder incentive use and a shift towards building slightly smaller homes. The median sales price of new houses sold in July fell 9% annually to $436,700.
“New home sales will likely weaken in August as higher interest rates price out prospective buyers,” said Robert Dietz, chief economist of the National Association of Home Builders.
Source: mpamag.com