The US Commerce Department announced this week that new home sales decreased to an 8-month low in June, decreasing 5.3%, the lowest since October 2017. While economic GDP reports last week show the US economy as robust, housing has seen rising building material costs and shortages of supply, causing its contribution to the US economy to weaken.
Mortgage rates are higher and loan applications to purchase a home fell 1%. Median new home price fell to $302,100, a 4.2% decrease from last year. New home sales fell in the South, West and Midwest, but in the Northeast new home sales increased to a 10 ½ year high.
Although new construction materials are at a higher cost, nearly 2/3 of the homes sold in June were under construction or yet to be built. Economists predict the fallout effect in the next half of the year may be with home product and furniture sales.