New home sales in the United States eased in August but remained high, the government reported Tuesday, as tight supply in the broader housing market kept the number of transactions high.
The lack of inventory for existing homes has kept demand for new properties elevated despite the high mortgage rates that have come about as a result of the Fed’s aggressive campaign of interest rate hikes to tame inflation.
Sales…
New home sales in the United States eased in August but remained high, the government reported Tuesday, as tight supply in the broader housing market kept the number of transactions high.
The lack of inventory for existing homes has kept demand for new properties elevated despite the high mortgage rates that have come about as a result of the Fed’s aggressive campaign of interest rate hikes to tame inflation.
Sales of new single-family houses fell 8.7 percent to 675,000 in August from a month earlier, the Commerce Department said, citing revised data for July.
This was below the median expectation of economists surveyed by MarketWatch.
But new home sales were 5.8 percent higher than a year earlier, underscoring the supply constraints that exist in the housing market.
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The US Federal Reserve has increased interest rates 11 times over the last 18 months as it looks to tackle inflation, which remains stuck stubbornly above the US central bank’s long-term target of two percent.
Higher Fed lending rates have pushed up borrowing costs on popular 30-year mortgages in the United States, making it harder for Americans to buy a home.
This pattern also discourages existing home owners who bought during the recent period of historically low interest rates from selling their properties, further constricting the supply of new dwellings.
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The median sales price for new homes sold in August was $430,300, down slightly from a month earlier.
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