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On Monday, US Commerce Department data had unwrapped that the sales of new US single-family homes had bottomed to a 14-month low last month with sales in the prior month being revised lower, pointing towards a perilous outlook in US homebuilding industry that had anchored the US economy along with mega-cap tech conglomerates during last year’s pandemic-led restrictions, as supply chain disruptions alongside a steep shortage of lumbers and raw materials exacerbated. On top of that, latest data from the US Commerce Department that said the sales of new US single-family homes had tumbled for a three-straight month in a row in June, came against the backdrop of a report which had unfurled last week that the building permits for future homes had plunged to a nine-month low in June, suggesting a long period of stagnation in US homebuilding market ahead despite a multi months-low mortgage rates.
US new home sales fall for a third-straight month in June
According to US Commerce Department data released earlier in the day, US new home sales fell by 6.6 per cent to a seasonally adjusted annualized rate of 676,000 units in June, the softest reading since April 2020, while sales on May had been revised down to 724,000 units from a prior reading of 769,000 units.
Meanwhile, referring to a growing rancour in US housing industry despite a multi-months low mortgage rate, a chief economist at Nationwide in Columbus, Ohio, David Berson said, “Home builders continue to hold back on contracts for new homes given input cost and availability uncertainties, with significant uncertainty about what it will cost to build a house and when it can be delivered.
Until builder costs and supply-chain problems become less of an impediment, it is hard to see new sales picking up significantly in the near term”. According to US mortgage buyer Freddie Mac, average 30-year fixed rate home loans fell to 3.01 per cent last week from a 3.03 per cent a week earlier, while 15-year fixed mortgage rates dipped to 2.31 per cent last week from a 2.38 per cent registered in prior week.