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WASHINGTON – New home sales in the United States have been rising during the summer months, despite high selling prices and weak home stocks.
Single-family home purchases – a relatively narrow slice of all home sales in the US – rose 6.7% to a seasonally adjusted annual rate of 689,000 in May, the Commerce Department said Monday. Economists surveyed by the Wall Street Journal were expecting a 0.9% lower increase.
From the previous year, sales rose 14.1% in May. The pace of new home sales remains well below the high levels seen before the financial crisis and the 2007-2009 recession.
Data on new home sales can be volatile. The gain of 6.7% recorded in May is accompanied by a margin of error of 14.1 percentage points.
Sales in the South seem to have boosted growth last month. New home purchases in the region rose 17.9%, the largest gain since the end of 2014. In the meantime, sales in the Northeast and the West have declined and purchases stagnated in the Midwest in May.
More generally, the inventory of the housing market has been tight, which has pushed up house prices and deprived some potential buyers of the market. The scarcity of labor in the construction sector and the rising cost of materials and mortgage rates are also headwinds for the housing market.
The average interest rate on a 30-year fixed rate mortgage in May was 4.59%, up more than half a point from 4.03% in January, according to Freddie Mac. According to the National Association of Home Builders, the record price of lumber has added nearly $ 9,000 to the price of a new single-family home since January 2017.
The spring sale season seems to remain neutral. Sales of second-hand homes decreased compared with the previous year in four of the first five months of this year. Meanwhile, home builders' future expectations for single-family home sales dropped by two points in June, according to the NAHB's recently released housing market index, although confidence remains strong.
"Improving economic growth, continued job creation and sustained housing demand are expected to spur additional single-family housing construction in the coming months," said Robert Dietz, Chief Economist. of the NAHB. "However, builders need to have access to lumber and other building materials at reasonable costs … especially for the entry-level market where inventory is the most necessary. "
Write to Sharon Nunn at [email protected] and Paul Kiernan at [email protected]
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