New construction sales beat expectations

New construction sales beat expectations

New construction sales beat expectations
The sales rate of newly built homes turned out to be better than expected in August as home builders increased inventory. The U.S. Census Bureau and Department of Housing and Urban Development reported last week that sales of new homes climbed 1.5 percent last month to a seasonally adjusted annual rate of 740,000 units. This exceeds previous forecasts by nearly 21,000 units.

Despite this increase, new home sales remain woefully behind where they were a year ago. Newly constructed home sales were down 24.3 percent in August compared to the same month last year.

New home sales have struggled to keep pace over the past few years as shortages in labor, land and supplies hinder construction efforts.

Today, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.00 percent.

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