It has been nearly 14 years since new home sales peaked like they did this past July. According to Bloomberg, purchases of new single-family homes jumped by 13.9% in July from June. In addition, median selling prices grew by 7.2% year over year. It is clear to see why: historically low mortgage rates, slim inventory for existing homes, and buyers want features that new homes flaunt. In response, builders are raising prices with roughly 70% of builders surveyed by John Burns Real Estate in July confirming they increased prices.
Purchases of new single-family houses climbed 13.9% from June to a 901,000 annualized pace from an upwardly revised 791,000, government data showed Tuesday. The median forecast in a Bloomberg survey of economists called for a 790,000 rate of sales. The median selling price rose 7.2% from a year earlier to $330,600.
Sales of new houses have taken off during the pandemic because borrowing costs have never been lower and listings for previously owned homes are in short supply. Shoppers want quarantine comforts, such as backyards and room for offices. And builders are shifting to lower-priced offerings, expanding the pool of potential buyers.
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