September 28, 2021

MP Now News

Mortgage News

New home sales dip for third consecutive month

New home sales continued to decline in June, down 6.6% versus Can to a pace of only 676,000, according to a current one to learn of the US census.

It’s the third straight month of declines and the first annual decline since the COVID-19 pandemic began.

The June pace is also 19.4% slower than its June 2020 pace of nearly 900,000, as prices for new homes rose to around 6% above last year’s average price in June 2021. The average retail price of new homes sold in June 2021 was $ 361,800. The average retail price was $ 428,700.

Even with overalls Inventory problems plaguing the national housing market, the availability of new housing was not such a major issue due to the high prices mentioned above, noted Danielle Hale, Chief Economist.

“As existing home sellers continue to return to the housing market, builders may have to compete with cheaper existing properties, even if they face higher property costs Material and labor needed to build houses, ”said Hale. “Builders are addressing this uncertainty by managing their pipelines and, in particular, increasing the number of homes for sale that haven’t started yet.”

That segment of home sales – the homes yet to be built – is up a staggering 84% year over year, Hale said.

“And these homes continue to sell quickly after they’re completed – within 3.5 months,” added Hale.

Regionally, with a seasonally adjusted pace of 367,000, the south was well ahead of the west (186,000), the Midwest (92,000) and the northeast (31,000). In the northeast in particular, this pace has decreased by 27.9% compared to May 2021 and by 40.4% compared to June 2020.

Zillow economist Matthew Speakman said demand for new homes should remain high as home buyers continue to prefer new build as an alternative to the “highly competitive” resale sector.

That demand should support sales volume for the foreseeable future, buy time for these supply restrictions to slowly ease and allow a return to growth in the months to come, ”said Speakman. “Year-to-year comparisons will become even more difficult in the months ahead as the market began to surge around this time last year, reaching highs not seen since the Great Recession.”

That Association of Mortgage Lenders Developer application survey data for June 2021 shows that mortgage applications for new home purchases are down 23.8% year over year. Compared to May 2021, the number of applications decreased by 3%.

MBA estimates new single-family home sales were 704,000 units annually, seasonally adjusted, in June 2021, based on data from BAS.

By product type, conventional loans accounted for 74.4% of loan applications, FHA Loans made up 14% percent, RHS / USDA loans made up 1% and will Loans were 10.6%.

The average new home loan amount increased from $ 384,323 in May to $ 392,370 in June.

“Home builders have been facing stronger headwinds recently as sharp price increases for key building materials, rising regulatory costs, and labor shortages affect their ability to increase production. This has dampened new home sales and accelerated home price growth, ”said Joel Kan, associate vice president of economic and industry forecasting for MBA. “In addition, the still low sales inventory is driving up prices as the competition for available units among potential buyers is still fierce.”