Currently Reading

June New-Home Sales Fail to Meet Expectations

Advertisement
Construction

June New-Home Sales Fail to Meet Expectations


July 27, 2021
home sale
Photo: MIND AND I | stock.adobe.com

The most recent data from the U.S. Census Bureau shows an unexpected fall in new-home sales, dropping 6.6% from May and 19.4% below June 2020 levels. Sales for newly built homes reached an annualized rate of 676,000 in June 2021 but were at 839,000 in June 2020. Analysts predicted a new-home sales increase of 3.4% for June, but price hikes may be putting new homes out of reach for many buyers, says CNBC. The median price for a new home increased 6% from June 2020 to June 2021. CNBC notes most of the homebuying now is happening on the higher end of the market, leaving builders unable to construct affordable homes due to construction prices.

Softwood lumber, in particular, spiked more than 300% during the pandemic, and while it has fallen back dramatically in the last month, it is still about 75% above its 2019 average. Other lumber products are still significantly more expensive.

“We also know there are shortages of appliances, labor and affordable lots,” noted Peter Boockvar, chief investment officer at the Bleakley Advisory Group. “The moderation in home sales is likely a combination of sticker shock and the slowdown in the ability of builders to finish homes because of a variety of delays.”

The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. Last fall, it sat at a low of just 3.5 months. In June, the number of homes for sale that had not yet been started hit an all-time high.

“Annual comparisons will get even more difficult in coming months, as it was this time last year that the market began to surge and reach highs not seen since before the Great Recession,” wrote Zillow economist Matthew Speakman in a release.

Buyers in June were also hit with higher mortgage rates, which spiked about a quarter of a percentage point during the month. While that may not sound like a lot, if buyers are already stretched by higher home prices, they have less of a financial cushion to absorb higher mortgage rates.

Read More
 

Related Stories

Building Materials

Building Material Prices Dipped in August

August marked the first month of building materials price drops this year, decreasing 1%, according to data from the Bureau of Labor Statistics.…

Women in Construction

Women Making Their Marks in Construction

Women constitute only about 11% of the construction workforce in the United States, yet some female home builders are finding ways to make their mark on the industry in key specialty areas.

Economics

Builders Struggle to Narrow the Housing Deficit

Builders simply can’t afford to produce more and cheaper houses.

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.