New home buyers are being deterred by higher prices, and that became readily apparent in April with a big slump in sales numbers for homes.
Sales of new, single-family homes dropped by 16.6% in April, falling to their weakest pace in two years, according to data from the Department of Housing and Urban Development and the U.S. Census Bureau published this week.
Builders say that rising mortgage rates are making new homes less affordable to buyers.
New-home sales are down nearly 27% compared to a year earlier, the report showed.
“The volume of signed sales contracts significantly declined in April as the cost of purchasing a home increased in 2022 as interest rates surged higher,” explained Jerry Konter, chairman of the National Association of Home Builders. “Higher construction costs fueled by rising material prices and supply-side constraints along with limited existing home inventory are pricing many potential home buyers out of the market.”