New home sales fall amid rising mortgage rates and prices

The Bureau and HUD reported that homes sold at a median price of $450,600 in April, while the average sales price was at $570,300. According to George Ratiu, senior economist at real estate listings website Realtor.com, this reported median sales price is 20% higher than last year, “pushing the monthly mortgage payment $720 higher, a 57% increase at today’s average mortgage rate.”

“The market for new homes is mirroring broader real estate trends, as rising inflation is taking a bigger chunk out of Americans’ paychecks and surging borrowing costs are compressing homebuyers’ budgets,” said Ratiu.

Mangold added that latest new home sales figures reveal how the market continues to feel the impact of on-going geopolitical turmoil and supply chain issues. Still, she noted that there’s continued for-sale housing demand from millennial households, with many migrating from high-cost coastal markets to high-growth sunbelt markets with higher builder inventory.

“The for-sale housing market has remained a strong performer during the entirety of the pandemic, and despite the somewhat uncertain economic conditions – demand for additional new housing remains strong,” said Mangold.

The seasonally adjusted estimate of new houses for sale at the end of April was 444,000, representing a supply of 9.0 months at the current sales rate, revealed the Bureau and HUD.