Sales of new single-family homes have risen to their highest level since 2006, increasing 14% between June and July to a seasonally-adjusted annual rate of 901,000, the U.S. Census Bureau reported Tuesday.
Nationwide, the median sales price in July was $330,600, up 7% from a year ago. The inventory of new homes fell to just 299,000, representing a 4-month supply. That’s down from a 4.6-month supply in June. A 6-month supply is considered the benchmark for a balanced market.
Demand among home buyers that was pent-up at the height of the coronavirus lockdowns this spring has been unleashed this summer — and record-low mortgage rates have pushed even more buyers into the market.
Builders are already having trouble keeping pace with demand, and materials costs are rising rapidly, which will add to upward pressure on new home prices. Some economists think affordability will be more sensitive to an increase in mortgage interest rates and question how long the strength in demand seen over the past few months can be sustained given the current labor market.
Basically, if you’re employed, and you’re thinking of buying, it may be a good idea to act now before rates and home prices both rise.