WASHINGTON- Sales of new U.S. homes slipped 0.6 percent in February, a third straight monthly decline. But year to date, marketings are up 2.2 percentage compared with 2017 in a sign that purchaser demand remains solid.
The Commerce Department told Friday that last month’s marketings came in at a seasonally adjusted annual rate of 618,000, down from 622,000 in January and 653,000 in December.
Homebuyers at the start of the spring buy season are generally determining higher prices and fewer properties available. Those factors, along with rising mortgage rates, have suggested that home ownership is becoming less affordable. The shortage of existing homes on the market is intensifying competition among would-be purchasers of newly built houses.
But purchasers seem undeterred in so far about the absence of available homes, given the low unemployment rate and wave of younger millennials who are entering the real estate market.
“The demand for new homes should continue to rise with a solid labour markets, modestly accelerating wages and positive demographics, ” told David Berson, chief economist for Nationwide Insurance.
Last month’s deterioration came largely from a 17.6 percent drop-off in new homes sold in the West. New-home sales fell in the Midwest but climbed in the Northeast and South. The median sales price of a new home climbed virtually 10 percentage from a year ago to $326,800.
New homes make up slightly more than 10 percent of homes now being sold. Among existing homes, marketings rose in February to a seasonally adjusted annual rate of five. 54 million, the National Association of Realtors said earlier this week. But the render on the market has been rapidly fading. Listings of existing homes have plunged 8.1 percent over the past year.
Rising borrowing expenses could worsen the render squeeze. Many homeowners are reluctant to upgrade to another home that would require them to take on a mortgage with a higher rate than they now pay.
The average rate this week for a 30 -year fixed interest rate mortgage was 4.45 percentage, up from an average last year of less than 4 percent, according to mortgage buyer Freddie Mac.
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