New Home Sales Rise as Buyers Seek Affordable Options

New home sales increased in July nationally, with a 4.4% rise from the previous month and a significant 31.5% increase compared to last year.

Why It Matters:

The surge in new home sales highlights the growing demand for affordable housing options amidst a low inventory of previously owned homes. Builders' efforts to attract buyers with lower prices and incentives have been successful in meeting this demand.

The Details:

• July's annualized rate of new home sales reached 714,000, indicating a steady increase.

• The median sales price of new houses sold in July was $436,700, showing a 4.8% increase from June.

• The seasonally adjusted estimate of new houses for sale at the end of July was 437,000, providing a 7.3 months supply at the current sales rate.

Conclusion:

The rise in new home sales reflects the appeal of affordable options in the current real estate market. Builders have adapted by offering smaller homes and incentives like interest rate buydowns, attracting buyers who struggle with higher mortgage costs. With limited options in the resale market, new construction presents an opportunity for both buyers and builders.