Us New Home Sales Declined

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Us New Home Sales Declined

US New Home Sales Declined 2.5% In June

The latest data reveals that new home sales in the USA fell during June, but the overall trend is still strong since there's a shortage of houses in the country.

Overall, a drop of 2.5% was recorded in new home sales, which means around 697,000 units are solid so far this year. The data from the Commerce Department also revised the May sales data with a new value of 715,000 units.

If we look at the forecast made by the economists, they were expecting around 725,000 new units to be sold. On the contrary, the actual value was only 697,000. According to experts, the recent decline could be attributed to seasonal trends or the fact that the interest rate in the country is at record-high levels.

New Home Sales Remain A Leading Indicator

In the USA, the signing of a contract is taken as a sign of new home sales, which remains a leading indicator for checking the health of the real estate sector. If we look back, data like this can be volatile if we look at it on a month-to-month basis. Now if we look at the data on a year-on-year basis, the sales increased by 23.8%!

Another important factor to consider is the existing home's inventory which is hovering at record-low levels. This has led to multiple offers by potential buyers on various properties.

This shortage of inventory is also increasing house prices, which were in a bearish trend earlier this year. At that time, the higher interest rates had pushed the buyers aside as they awaited a better macro environment.

If we look at the bigger picture, the housing market of the USA is stabilizing, but the higher interest rates continue to remain a problem. Within the next few days, the Fed will raise interest rates once again, which further increases the borrowing costs in the country.

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