August 23, 2022 12:12pm EDT
US new home sales plunge for sixth straight month to lowest level since 2016
Economists expected purchases of new single-family homes to fall 2.5%
By Megan Henney FOXBusiness
Sales of new U.S. homes plunged more than expected in July to the lowest level in six years as rising mortgage rates and the relentless increase in home values slowed activity by edging prospective homebuyers out of the market.
New single-family home purchases tumbled 12.6% to a seasonally adjusted annual rate of 511,000 units, the Commerce Department reported on Tuesday. It marked the sixth consecutive month of declines. Economists surveyed by Refinitiv expected new home sales – which account for a small percentage of total sales – to fall 2.5% last month.
On an annual basis, new home sales are down 29.6%.
Despite the slowdown in purchases, the cost of a new home continued to march higher in July, with median prices jumping nearly 9% in July from the previous month to $439,400.
The collapse in home sales is the latest evidence of how the housing market has started to cool as the Federal Reserve hikes interest rates at the fastest pace in decades in order to bring scorching-hot inflation under control. Policymakers already approved two consecutive 75-basis point rate increases in June and July and confirmed that another super-sized hike is on the table in September.
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https://www.foxbusiness.com/economy/us-new-home-sales-plunge-sixth-straight-month-lowest-level-2016
