- Sales of newly built homes sank to the slowest rate since the start of the Covid pandemic.
- The median price of a new home sold in April was $450,600, an increase of nearly 20% from the year before.
- Slower sales caused the inventory of newly built homes to jump sharply as well to a nine-month supply. A six-month supply is generally considered balanced between buyer and seller.
- Sales of newly built homes dropped 16.6% in April from March, far more than expected, and were down 26.9% from April 2021, according to the U.S. Census.
- The annualized rate came in at 591,000 units, seasonally adjusted. Analysts had been expecting 750,000. March’s read was also revised lower.
- That is the slowest sales pace since April 2020, when everything shut down at the start of the Covid pandemic. Sales surged quickly after that, as Americans sought bigger homes with outdoor spaces for quarantining.
- Rising home prices mean today’s mortgage holders also have record levels of equity.
- With interest rates poised to rise, many homeowners may want to tap those funds.
- But just because you can, that does not mean you should, experts say.
- Record increases in home prices are also pushing up the amount of equity people have in their abodes. For many Americans, that means they can borrow more against what is often their biggest asset.However, financial experts caution you should think carefully before making such a move.
The average mortgage holder currently has about $185,000 in home equity to tap, which is the amount they can access while still retaining a 20% stake, according to mortgage research from Black Knight.
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Source: National Assn. of Homebuilders
Lumber prices are climbing once again, adding thousands of dollars to the cost of a new home. Builders and consumers thought relief had arrived when the price of lumber started to fall late last year, after soaring to record highs earlier in the year. But starting in December 2021, lumber prices again started to increase. Lumber prices are about triple their average pre-pandemic levels, reports Random Lengths, a lumber industry news site. That’s adding more than $18,600 to the price of a newly built home, the National Association of Home Builders reports.