On Wednesday, US Commerce Department data had revealed that the sales of newly built single-family homes faltered to a one-year low last month, as the median prices of newly constructed houses kept climbing in context of a flaming timber prices.
Aside from that, latest Commerce Department data pointing towards a perilous outlook in US homebuilding market that had anchored the US economy during the pandemic-led restrictions last year amid a multi-year low mortgage rate, came forth a day after the US National Association of Realtors (NAR) had said in a statement that US existing home sales had tumbled for a fourth straight month in a row in May, while median house prices had spiked to a record.
US new home sales fell to fresh one-year low
According to US Commerce Department data released earlier in the day, US new home sales fell by 5.9 per cent to a seasonally adjusted 769,000 units in May on an annualized basis, the lowest level since May 2020, while April’s new home sales data had been revised lower to 817,000 units from a previously reported reading of 863,000 units.
On top of that, the median of newly built house prices in the United States leapfrogged as much as 18.1 per cent to $374,400 in May compared to the same time a year earlier. Besides, the US housing market might have been on the brisk of a steep drawdown as a hawkish Fed would likely to lead to an upsurge in mortgage rates, suggested analysts.
As of Wednesday, average US 30-year refinance rates ticked up to 3.25 per cent compared to a 3.12 per cent a week earlier and the average 15-year fixed refinance rate shot up to 2.54 per cent from 2.38 per cent a week earlier, while 10-year fixed refinance rate climbed 20 percentage basis points to 2.58 per cent.
Meanwhile, referring to a likely collapse in US housing market amid a steep supply shortage alongside a sky-scrapping price-surge, a chief economist at FWDBONDS in New York, Chris Rupkey said following the announcement, “New home sales along with existing home sales suggest home buying activity is past its peak.
We don't know what is going to happen when the stay-at-home economy shifts to going back to the office. ”