New Home Sales Decline Despite Highest Inventory Since 2008

The total supply of new homes rose to its highest level since 2008 in February, but new home sales across the U.S. decreased 2% to an annual rate of 772,000, Realtor.com reports. Builders are working quickly to reverse a major housing shortage and ease home price growth nationwide, but decades of underbuilding have left a substantial deficit to overcome.

In the meantime, average sales prices for a new home sold in February reached a new high of $511,000, while the median list price was $400,600. A boost in mortgage rates also threatens to price out a growing number of buyers glued to the sidelines as a result of limited inventory and a lack of affordability.

“With the median sales price of new homes up, and only roughly 1 in 10 new homes sold for less than $300,000 compared with 3 in 10 new homes in this price range last year, a new home is not an option for many first-time homebuyers even before the impact of higher mortgage rates is considered,” said Danielle Hale, chief economist at Realtor.com.

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