Unsold homebuilder inventory is ticking up as new home sales slow

After a boost in July, the sales pace of new homes slowed in August, according to data published on Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). 

In August, the sales pace of new homes fell 8.7% compared to July, reaching a seasonally adjusted annual rate of 675,000. On a year-over-year basis, new home sales were up 5.8%.

However, mortgage applications for new home purchases increased 4% between July and August, the strongest pace of sales in three months.

“Homebuilders are still benefiting from very low inventory of existing homes for sale, which has driven more buyers to consider new construction,” Bright MLS Chief Economist Lisa Sturtevant said. “But with mortgage rates elevated and home prices high, affordability is a growing concern for home buyers.”

​​The median sales price of a new house sold in August 2023 was $430,300, while the average sales price was $514,000. The seasonally‐adjusted estimate of new houses for sale at the end of August was 436,000.  At the current sales rate, this represents a supply of 7.8 months.

The inventory of unsold new homes is at its highest since December, Holden Lewis, home expert at NerdWallet said, and builders will be motivated to offer incentives to get them sold.

“Look for a resurgence of mortgage-rate buydowns, in which the sellers give buyers a break on the monthly payments for the first one to three years,” he added. 

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Mike McNamara

Mike McNamara

A Las Vegas Realtor since 2008. Mike has a wide range of knowledge around all things Las Vegas.

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