New home sales fall as mortgage rates weigh down housing market
By
Zachary Halaschak
March 25, 2024 12:34 pm
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New home sales fell in February as the housing market felt the effects of higher mortgage rates, which have remained at multiyear highs for months.
New home sales fell 0.3% from January to 662,000, according to a Monday report from the Census Bureau. Nevertheless, the number of new home sales is nearly 6% higher than it was in February of last year, in part because the inventory of pre-owned homes is so low that buyers have been forced into the market for new stock.
The median sales price for a new home was $400,500 in February. The median price has now fallen for three consecutive months and, notably, is the lowest it has been since June 2021, when mortgage rates were ultra-low, typically below 3%.
Prices for new home sales have generally fallen since peaking at nearly $497,000 in October 2022. Yet new home prices are just under 30% higher than their trough at the start of the pandemic.
“Mortgage rates rose in February, and the elevated rates took a bite out of new home sales,” Holden Lewis, a housing expert at NerdWallet, said. “Builders are competing with home resales by constructing new homes for buyers on a limited budget. Half of new homes sold in February cost under $400,000. A year earlier, just 42% were in that price range.”
more
https://www.washingtonexaminer.com/policy/finance-and-economy/2936806/new-home-sales-fall-mortgage-rates-housing-market/
