Zillow senior economist Aaron Terrazas labeled the new home sales market as “haltingly progressive,” over the past year, but says now the market may reverse itself.
While builders recognize the searing demand from homebuyers, especially in the affordable, starter-home segment of the market, “building conditions right now just aren’t cooperating,” says Zillow’s Terrazas. Citing competition for skilled labor, cost of materials, and the lack of buildable, desirable, affordable land are just three major factors undercutting builders. “Recent trade actions have boosted the wholesale prices of key home building materials… In a market where demand outpaces supply, consumers ultimately pay the price for these policy decisions.”
February new home sales fell 0.6 percent from January, to 618,000 units (SAAR), the third straight month of declines compared to the month prior. New home sales were up 0.5 percent year-over-year. The median February new home sales price was $326,800 (non-seasonally adjusted), up 9.7 percent from a year ago. Inventory of new homes available for sale rose 16 percent from a year ago.
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