(Bloomberg): U.S. new home sales fell sharply in May as high prices and mortgage rates continue to discourage buyers.
Sales of new single-family homes fell short of nearly all expectations, reflecting declines in all four major regions.
The pace of sales has fallen to the low end of the range over the past year, suggesting a lack of momentum amid a lack of affordability. Mortgage rates fell below 7% in mid-June for the first time since late March, but are still more than double what they were at the end of 2021.
While high prices are scaring off many buyers, surging inventory is helping to improve affordability. The median price of a new home fell 0.9 percent in May from a year earlier to $417,400. Residential supply rose to 481,000, the highest level since 2008.
Recent data shows demand for housing broadly picked up in June. The Mortgage Bankers Association’s index of homebuying applications rose for the past three weeks to its highest level since early February.
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Original title: US New-Home Sales Slump to Slowest Pace Since November (excerpt)
Reporting assistance from Chris Middleton.
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