New Home Sales Increased Sharply in August 2022
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The Federal Reserve's vigorous campaign of monetary policy tightening to slow the economy and manage inflation was having some desired effects on the housing market. A total housing market crash is improbable, however, while home values remain elevated and there is a severe dearth of previously owned properties. Other evidence implies the housing market is slowing, including data showing home prices rose 15.8% yearly in July, down from nearly 20% in June. Despite the August boost, new home sales are predicted to be sluggish in 2022. New single-family housing construction has stagnated, and residential building permits are down.
To be included in the sales estimates the sales transaction must intend to include both the house and the land. All new houses are not included in our new residential sales estimates, only houses sold prior to being built or built for sale are included in these statistics. Excluded from these estimates are houses built for rent, houses built by the owner, and houses built by a general contractor on the owner's land. New Home Sales reflect a dollar value of sales of newly constructed residences in the United states in the given month. Also, houses built by land owners and houses built for leasing are not included.
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Sales in the under-$200,000 price bracket, the sought-after segment of the market, accounted for a mere 1% of transactions. "The pandemic has accelerated the migration to suburban markets and metro areas in lower-cost states such as Arizona, Utah, Texas and Florida," said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina. "By contrast, new home sales weakened in areas where population growth has slowed, in part due to an outflow of residents seeking more affordable real estate, lower taxes and other lifestyle advantages." Though lumber prices have dropped sharply from May's record highs, they remain above their pre-pandemic levels.
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Sales of previously owned homes logged their ninth straight monthly decline in October, while single-family homebuilding and permits for future construction dropped to the lowest levels since May 2020, reports showed last week. "In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020," said NAR Chief Economist Lawrence Yun. August housing starts, a measure of new home construction, jumped 12.2% from July, and were down 0.1% from a year ago, according to the US Census Bureau. After a big drop earlier this spring, housing starts had been holding relatively steady up until last month. This latest increase in new housing starts is a good thing for the housing market because inventory has been so tight.
New home sales in the United States fell 10.9% to a seasonally adjusted annualised rate of 603K in September of 2022, after jumping by a downwardly revised 24.7% in August and compared with market forecasts of 585K. Housing demand in the US has been sharply falling as the Federal Reserve is aggressively raising interest rates to combat the surge in inflation. Sales fell in the South (-20.2% to 356K) and the West (-0.7% to 135K) but rose in the Northeast (56% to 39K) and the Midwest (4.3% to 73K). The median sales price of new houses sold was $470,600, up 13.9% from a year ago and the average sales price was $517,700.
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He’s also the host of the top-rated podcast – Passive Real Estate Investing. No matter what you're wanting to add to your home gym, these year-end deals at Dick's Sporting Goods have something for every individual. But time is of the essence here, so make sure to secure what you like ASAP or risk the chances of it selling out. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Last month's gain in new home sales was driven by a 1.3% rise in the populous South and a 14.4% jump in the West. Sales plunged 24.1% in the Northeast and decreased 20.2% in the Midwest.
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It looks like we are finally getting up to speed with building houses... I think we are at a point where demand and supply will likely stabilize and price will not continue to rise.... United-states’s new home sales are published monthly and is an economic indicator that measures sales of newly built homes. Explore MacroVar financial knowledge base structured by professional fund managers and economists. Sales of new US single-family homes unexpectedly jumped in October, shrugging off rising mortgage rates and house prices, which have drastically eroded affordability.
Stocks on Wall Street were trading higher, with the S&P 500 (.SPX) and Nasdaq (.IXIC) indexes hitting record highs, boosted by oil and travel-related shares. United States new home sales closed down 632 as of October 31, 2022 from 588 from the previous month and 667 from last year. The median price of an existing home in the west was $569,800 in November, up 2% from November 2021, NAR said. “The West region experienced the largest decline in home sales and the smallest increase in home prices compared to the other regions of the country,” said NAR Chief Economist Lawrence Yun. In California, existing home sales totaled 237,740 in November, down 13.2% from October and 47.7% from a year ago, according to the California Association of Realtors. The sale of existing homes in the U.S. continues to slide, and California has seen some of the largest declines in the nation.
The housing market has been hammered by aggressive Federal Reserve interest rate hikes that are aimed at curbing high inflation by dampening demand in the economy. The 30-year fixed mortgage rate breached 7% in October for the first time since 2002, data from mortgage finance agency Freddie Mac showed. Increased mortgage rates have forced many prospective purchasers to cancel contracts or postpone home purchases because they cannot afford the higher monthly payments. The increase in new-home inventories is assisting in slowing the price rise.
About This Data The New Home Sales data above is the seasonally adjusted annual rate. There were 367,000 new homes on the market in July, the highest since November 2008 and up from 348,000 in June. New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it's released ahead of Existing Home Sales because the reports are tightly correlated. Economists polled by Reuters had forecast new home sales, which account for about 10% of US home sales, would decline to a rate of 570,000 units in October. New homebuyers made up just 28% of sales in November, which was the same rate as in October.
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