Sales of new single-family homes plummeted in April as rising mortgage interest rates and skyrocketing house prices took a toll on the market.
New-home sales fell 16.6 percent last month from the revised March figures, according to Census Bureau data released Tuesday. Sales were down 26.9 percent from April 2021.
“The April drop for new home sales is a clear recession warning,” said Robert Dietz, chief economist for the National Association of Home Builders.
The median sales price of new houses sold last month was $450,600, 19.6 percent higher than a year earlier. The average rate on a 30-year fixed mortgage was about 5.3 percent last week, according to Freddie Mac, up from 3.2 percent in the first week of January.
“The combination of higher prices and increased interest rates are generating a notable slowing of the housing market,” Dietz said. “While the nation needs additional housing, home sales are slackening as tightening monetary policy continues to put upward pressure on mortgage rates and supply chain disruptions raise construction costs.”
There were an estimated 444,000 new homes for sale in April — a supply of nine months at the current sales rate, compared with 4.7 months a year earlier.