According to the National Association of Home Builders, the sales of newly built, single-family homes has had a slow down of 13.4 percent to a seasonally adjusted annual rate of 394,000 units in July 2013. This is due to the rise in mortgage rates and lead to a pause in buying activity. These figures come from newly released data from HUD and the U.S. Census Bureau.
“The drop-off in sales in July is in part a reflection of buyers’ reaction to the recent uptick in mortgage rates as people reassess their budgets to determine how much house they can afford,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “Consumers just need a little time to adjust to the new parameters of the market.”
“New-home sales figures refer to newly signed contracts to purchase a home, rather than a completed sale, and it’s likely that the higher rates caused some buyers to delay putting pen to paper,” explained NAHB Chief Economist David Crowe. “However, there is still a great deal of pent-up demand for homes in markets nationwide, and builders continue to report improving consumer interest. This suggests that what we’re seeing is a temporary pause, and that buyers will return to the market once they are confident that the higher mortgage rates are here to stay.”
Every region recorded lower new home sales in July, with declines of 5.7 percent, 12.9 percent, 13.4 percent and 16.1 percent reported for the Northeast, Midwest, South and West, respectively. Meanwhile, the inventory of new homes for sale edged up to 171,000 units in July, which is a 5.2 month supply at the current sales pace.
The resale market continues to be hot, especially in Arizona regardless of the rise in mortgage rates. Residential painting contractors continue to be busy with calls from people seeking to repaint their existing home or a newly purchased home.
Information taken from article published in the Painting Pro Times, August 2013 edition