The trends of rising interest rates and Lumber pricesCoupled with delivery constraints, new home sales soared to a 10-month low in February.
Newly built single-family home sales fell 18.2% to a seasonally adjusted annual rate of 775,000 – the lowest level since May 2020, data from the U.S. Department of Housing and Urban Development and the Census Bureau showed. The February value of 775,000 units is the number of homes that would be sold if this pace continued for the next 12 months.
“Although buyer traffic remains strong, home construction is delayed due to lack of materials,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB). “This is forcing builders and buyers to grapple with rising affordability issues as rising lumber prices have increased the price of a new home by more than $ 24,000.”
The median retail price was $ 349,400, up 5.3% from $ 331,800 in 2020. Inventory increased slightly to 4.8 months and 312,000 new single-family homes were available for sale. This is 12.7% less than in February a year ago. Homes for sale that have not yet started construction and are up 67% year over year indicate increasing delays and higher construction costs.
“While rising material costs and other supply-side issues are causing delays on some projects, other factors contributing to the slowdown are the Winter storms in areas like Texas and rising mortgage rates, which have risen by more than 30 basis points in the last five weeks, ”said Robert Dietz, chief economist at NAHB.
Since the beginning of the year, sales of new homes in the west have declined regionally by 9.3% and increased in the three other regions: 6% in the northeast, 24.7% in the Midwest and 23.2% in the south.