Homebuilders are selling more and cheaper new houses the🔥se days, the opposite of the trend in the market for existing homes where sales are slow and prices hitting💟 record highs. 

Sales of new homes rose 4.4% in July from June, making for a 31.5% increase on the year, the Census Bureau said Wednesday. If sales continued that pace for the entire yea❀r, 714,000 houses wo꧒uld sell, the fastest seasonally-adjusted annual rate since February 2022. The median new home sold for $436,700, an uptick from $416,700 in June, but significantly down from the $478,200 price in July 2022.

That’s a stark contrast to languishing sales for existing homes, which fell 2.2% in July from the month prior and were down 16.6% year-over-year, the National Association of Realtors said this week. 

Prices, by some measures, are rising to record levels. Both markets are being hurt by mortgage rates which have 澳洲幸运5官方开奖结果体彩网:soared to multi-decade highs, driven upward from pandemic-era lows by the Federal Reserve’s 澳洲幸运5官方开奖结果体彩网:campaign of anti-inflation interest rཧate hikes. Those rates have 澳洲幸运5官方开奖结果体彩网:pushed monthly mortgage payments to beyond the reach of most households.

So, why the difference between the two markets?

According to the National Association of Homebuilders, new home sales are benefitting from a huge problem holding back existing home sales: a severe lack of inventory. There were just 1.1 million homes for༺ sale in July, according to the NAR—less than half as many as the average between 1999 and the onset of the pandemic. 

Homeowners have been reluctant to sell and abandon the low mortgage rates they secured during the long 澳📖洲幸运5官方开奖结果体彩网:years of relatively low borrowing costs. With few homes for sale, sellers have kept the upper hand in the market and haven’t been forced to lower prices.

Builders have been stepping in to meet the demand, and have even been selling at prices competitive with used homes. In June, the median new home sold for just $6,700 more than the median existing one, according to data from the Census Bureau and the NAR.

“It appears that homebuilders are constructing cheaper homes to meet homebuyers who cannot find adequate supply from the resale market due to the lock-in effect of prior low mortgage rates,” Conrad DeQuadros, senior economic advisor at Brean Capital, said in a commentary.