Sales of new homes fell 16.6% in the last month as rising interest rates reduce the possibility of home ownership for many families.
Interest rates have risen to 5.25% as of this week, up from 3.1% at the start of the year, the Wall Street Journal (WSJ) reported.
This month’s drop of sales in new homes is the biggest drop in a month since 2013, the outlet noted. (RELATED: ANALYSIS: Wall Street Wants To Take Over Your Home)
“The entry-level consumer, which is the largest buyer group, is moving to the sidelines,” Margaret Whelan, chief executive of Whelan Advisory, told the WSJ.
Sales plunge as prices stay high.
Stagflation in Housing.
The economic mess brought to you by the inflationary madness of Biden-Pelosi-McConnell pic.twitter.com/rYwMCmsXPi
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Home prices have rose by 18.8% last year, according to the S&P CoreLogic Case-Shiller National Home Price Index, a method of measuring average home prices in major metropolitan areas, the WSJ reported. Fewer home buyers are first time buyers, down to 27% in January of this year down from 33% the year before, the National Association of Realtors stated, according to the WSJ. (RELATED: After Falling Back To Earth, Lumber Prices Skyrocket Again)
Home prices are continuing to rise, despite the Fed’s increasing interest rates. A February poll of 33 property analysts estimated U.S. housing prices rising by 10.3% this year, Reuters reported. Home prices rose to a median price of $375,000 in March of this year.