February 28, 2024

New-Home Sales Decline To a 6-Month Low Rate

A stagnant job market and a big overhang of unsold existing homes have combined to keep new-home sales low even as mortgage rates returned to lows not seen since at least the early 1970s.

New-home sales slipped 2.3 percent last month to a 295,000 annual rate, a six-month low, the Commerce Department said on Monday. That was in line with analysts’ forecasts and did little to allay fears that the United States could slip back into recession.

The median sales price also moved lower from the previous month and was 7.7 percent below year-ago levels.

“There’s no sign yet that low mortgage rates are helping the housing sector,” said Gary Thayer, a strategist at Wells Fargo Advisors in St. Louis.

The Federal Reserve last week announced new measures to ease credit further for home buyers, but analysts cautioned that the level of mortgage rates was not the main hurdle to buying.

Heavy debts taken on during the housing boom in the previous decade are also making consumers cautious to spend.

In its monthly report on single-family home sales, the government raised its estimate for July’s sales pace slightly to 302,000 units. Also, the supply of homes available on the market in August dropped to a record low.

Data last week showed new construction of homes fell in August, dragging on economic growth.

“The housing sector can’t get any worse,” said Michael Englund, an economist at Action Economics in Boulder, Colo.

Article source: http://feeds.nytimes.com/click.phdo?i=99940ef2acff4659c3bc52ab62742f0a

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