Please ensure Javascript is enabled for purposes of website accessibility
July Sales of New Homes Surge 13.9%, Far More Than Thought
gvw_ap_news
By Associated Press
Published 4 years ago on
August 25, 2020

Share

SILVER SPRING, Md. — Sales of new homes jumped again in July, rising 13.9% as the housing market continues to gain traction following a spring downturn caused by pandemic-related lockdowns.

The Commerce Department reported Tuesday that July’s gain propelled sales of new homes to a seasonally-adjusted annual rate of 901,000, the most since 2006. That’s a far bigger number than analysts had expected and follows big increases in May and June. The government report has a high margin of error, so the July figures could be revised in the coming months.

The recent sales gains followed a steep dropoff in March and April as much of the country stayed home due to government restrictions intended to slow the spread of coronavirus.

In a report last week, the National Association of Realtors reported that sales of existing homes rose by a record 24.7% in July, thanks to historically low interest rates. It was the second big spike in as many months and has helped stabilize the housing market in an otherwise uncertain economic time.

Sales Are Being Fueled by Ultra-Low Mortgage Rates

Low inventory of existing homes is pushing buyers into the new homes market, but inventory there is also shrinking. What was a 6-month supply of new homes a year ago is now down to a 4-month supply, thanks to a red-hot market.

The Commerce Department reported last week that construction of new U.S. homes surged 22.6% in July as homebuilders bounced back from a lull induced by the coronavirus pandemic. New homes were started an annual pace of nearly 1.5 million in July, the highest since February. They’ve now risen three consecutive months after plunging in the spring. Last month’s pace of construction was 23.4% above that of July last year.

Sales are being fueled by ultra-low mortgage rates, which earlier this month dropped below 3% for a 30-year-fixed rate mortgage for the first time in nearly 50 years. The average rate on a 30-year fixed rate mortgage is now 2.99%, the mortgage buyer Freddie Mac said Thursday. A year ago, it was 3.55%.

Economists believe low rates and changes in home preferences brought on by the pandemic will continue to support sales, though perhaps not at recent levels.

“Sales may struggle to maintain their July pace going forward,” said Nancy Vanden Houten of Oxford Economics. ”While strong demand and lower mortgage rates are supportive of further growth in sales, the slow recovery and weak labor market pose downside risks.”

Regionally, construction of new homes fell only in the Northeast, which saw a 23.1% decline. The Midwest saw a whopping 58.8% increase, followed by the South’s 13% jump and an increase of 7.8% in the West.

The median price of a new home sold in July increased to $330,600, up 7.2% from one year ago.

RELATED TOPICS:

DON'T MISS

Smokey Robinson, Anthony Jeselnik, and Brit Floyd Are Top Choices for Father’s Day Weekend

DON'T MISS

This Shy Sweetheart Was Dumped in a Parking Lot with Her Siblings

DON'T MISS

Fresno City Attorney’s Wage Theft Unit Targets Valley Children’s Hospital

DON'T MISS

Fresno Police Chief Balderrama on Paid Leave, City Manager Says

DON'T MISS

Konstadinos T. Moros Discusses Gov. Newsom’s Proposed Firearms Amendment on Unfiltered

DON'T MISS

US Inflation Eases in May, Indicating Potential Relief from Price Pressures

DON'T MISS

Over 200 Rockets Launched from Lebanon Following Israeli Strike on Hezbollah Commander

DON'T MISS

Rep. Costa Blasts GOP House For Holding AG Merrick Garland in Contempt

DON'T MISS

Is California’s $20 Minimum Wage to Blame for Loss of 10,000 Fast-Food Jobs?

DON'T MISS

Balderrama: ‘I Plan on Leading This Police Department to Even Greater Heights’

UP NEXT

AP Sources: 8 Individuals Possibly Linked to Islamic State Arrested in US

UP NEXT

NBA Legend and Logo Jerry West Dies at 86

UP NEXT

Shaver Lake Drowning Victim Identified by Sheriff’s Office

UP NEXT

Cold Stone Creamery Could Shell out Cash for Not Putting Pistachios in Pistachio Ice Cream

UP NEXT

Justice Alito Questions Possibility of Political Compromise in Secret Recording

UP NEXT

Hunter Biden Convicted on All Three Felony Counts in Federal Gun Trial

UP NEXT

Blinken Calls on Hamas to Accept Gaza Cease-Fire Plan After UN Security Council Strongly Endorses It

UP NEXT

CHP Bust Yields 10 Pounds of Fentanyl Powder, Two Arrests

UP NEXT

Trump Urges Anti-Abortion Group to Defend ‘Innocent Life’

UP NEXT

Pew Poll: Most Black Americans See Conspiracy by US Institutions

Fresno Police Chief Balderrama on Paid Leave, City Manager Says

14 hours ago

Konstadinos T. Moros Discusses Gov. Newsom’s Proposed Firearms Amendment on Unfiltered

14 hours ago

US Inflation Eases in May, Indicating Potential Relief from Price Pressures

15 hours ago

Over 200 Rockets Launched from Lebanon Following Israeli Strike on Hezbollah Commander

15 hours ago

Rep. Costa Blasts GOP House For Holding AG Merrick Garland in Contempt

16 hours ago

Is California’s $20 Minimum Wage to Blame for Loss of 10,000 Fast-Food Jobs?

17 hours ago

Balderrama: ‘I Plan on Leading This Police Department to Even Greater Heights’

17 hours ago

Wired Wednesday: Clovis Raises Water Development Fee by 105%. Impact on Homebuyers?

18 hours ago

As Californians’ Stance on Crime Hardens, Republicans Try to Regain Relevance

18 hours ago

Lawsuit Claims Valley Children’s Paid On-Call Employees Less Than Minimum Wage

Smokey Robinson, Anthony Jeselnik, and Brit Floyd Are Top Choices for Father’s Day Weekend

There’ll be an assortment of events you can do with your dad this Father’s Day Weekend. R&B singer Smokey Robinson, comedian...

27 mins ago

27 mins ago

Smokey Robinson, Anthony Jeselnik, and Brit Floyd Are Top Choices for Father’s Day Weekend

56 mins ago

This Shy Sweetheart Was Dumped in a Parking Lot with Her Siblings

Fresno City Attorney’s Wage Theft Unit Targets Valley Children’s Hospital

14 hours ago

Fresno Police Chief Balderrama on Paid Leave, City Manager Says

14 hours ago

Konstadinos T. Moros Discusses Gov. Newsom’s Proposed Firearms Amendment on Unfiltered

15 hours ago

US Inflation Eases in May, Indicating Potential Relief from Price Pressures

15 hours ago

Over 200 Rockets Launched from Lebanon Following Israeli Strike on Hezbollah Commander

16 hours ago

Rep. Costa Blasts GOP House For Holding AG Merrick Garland in Contempt

MENU

CONNECT WITH US

Search

Send this to a friend