Record high US house prices, soaring mortgage rates indent new home sales
by SOURAV D | VIEW 1254
The US Commerce Department data had unveiled late on Tuesday that the sales of new US single-family houses had tumbled to a two-year low last month, as a skyrocketing mortgage rate which had been soaring at a breakneck pace amid an ultra-hawkish Fed had added to holocaust on buyers’ morale. In the matter of the fact, new single-family homes are the most lucrative item in the US homebuilding industry, while a sharp downturn in single-family sales would likely to weigh heavily on second-quarter economic growth, suggested analysts. If truth is to be spoken, during the pandemic-led fiscal downturn, a blazing US housing market alongside a renewed dot com bubble led by the tech moguls like of Alphabet Inc-owned Google LLC., Amazon.com Inc alongside Netflix among others had kept the US economy afloat.
New US single-family home sales slumped as mortgage soars
According to US Commerce Department data, US new home sales slumped by 16.6 per cent last month to a seasonally adjusted annualized rate of 591,000 units, marking off the lowest figure since the April of 2020.
Fanning up the flames further, March’s sales pace was revised lower to 709,000 units from a previously reported 763,000 units. Sales tumbled by 5.9 per cent in the Northeast and 15.1 per cent in the Midwest, while sales plummeted 19.8 per cent in densely populated south and 13.8 per cent in the West.
Besides, according to US mortgage buyer Freddie Mac, US long-term 30-year fixed rate mortgages leapt 5 above 5 per cent for the first time in more than a decade last month, while as of May 19, 30-year fixed rate home loans jumped 5.25 per cent.