The rate at which homebuyers in the U.S. are purchasing new homes is currently at its lowest pace in over six months according to new data. Purchases of newly built single-family homes fell by 7.8 percent in May to a seasonally adjusted annual rate of 626,000, acording to the U.S. Department of Commerce. This is below economists’ expectations in a survey conducted by The Wall Street Journal who forecasted new home sales to be closer to 683,000.
As they sit on the market unsold, the supply of newly built homes on the market is increasing. New home inventory was approximately 6.4 months as of May, up from 5.6 months last year.
Sales of newly built homes have flatlined for most of the past year as builders failed to focus on entry level priced homes and instead flooded the market with larger, more expensive dwellings.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 percent.
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