The market always works... demand went up; supply can’t keep up, so prices went up until the high prices leveled demand. National stats are misleading as certain geographies will continue to see crushing demand as others level off. Some areas never saw it in the first place. But it does look like the housing market has peaked for now.
Sales of newly built homes dropped in June to the lowest level since the early days of the coronavirus pandemic in April 2020, according to data released by the U.S. Census Bureau on Monday.
Sales of new single-family homes fell to an annualized rate of 676,000, 6.6% below May’s rate of 724,000 and 19.4% below the June 2020 level of 839,000. Analysts were expecting new home sales to increase by 3.4% in June to 795,000.
After a year of frenzied buying and price gains in the double digits, newly built homes are now out of reach for much of the demand that remains in the market.
The median price of a newly built home in June rose just 6% from June 2020, and while that is a large gain historically, it is nothing compared with the 15-20% annual gains seen in previous months.
Most of the homebuying is on the higher end of the market, and builders cannot afford to put up affordable homes due to skyrocketing construction costs.