By NAHB
Elevated mortgage rates, rising inflation and economic uncertainty kept many buyers out of the market in May as consumers and builders continue to deal with challenging affordability conditions.
Sales of newly built single-family homes fell 7.3% in May to a seasonally adjusted annual rate of 580,000, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is down 6.8% from a year earlier.
“The decline in builder sentiment is consistent with our latest builder surveys,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio. “Many potential buyers remain on the sidelines as elevated mortgage rates, higher construction costs and limited purchasing power continue to reduce the pool of qualified buyers.”
“While builders are employing incentives and pricing adjustments to support sales activity, many households remain priced out of the market,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “A sustained reduction in financing costs would help improve housing affordability and strengthen housing demand. The trajectory of mortgage rates and improvements in housing affordability will be key factors determining whether demand stabilizes in upcoming months.”
