The US Census Bureau, in conjunction with the Department of Housing and Urban Development, track New Home Sale data each month. The June 2021 release showed some startling figures – the number of raw new home sales dropped to 60k. A year earlier in June 2020 this figure was 79k, indicating a -24% crash over the last 12 months.
Why are sales declining? Likely because 1) home buyers are being priced out of the market and 2) banks are hesitant to lend even to the buyers who aren’t priced out. This combination of hesitancy from both buyers and lenders is causing declines in sales volume to occur across the country.
New Homes Sales have historically behaved as a LEADING INDICATOR for the Housing Market. That means when New Home Sales go up, home prices tend to go up into the future. And that when New Home Sales go down, home prices go down into the future. The last time New Home Sales fell at such a high percentage was the last Housing Crash from 2008-12.
Some are suggesting that sales are down not because of demand but because of supply. The argument goes that home builders have not been able to build enough inventory, and thus, there aren’t enough homes to buy. But data from the US Census Bureau contradicts this claim, with a 10-year record of 358k newly built homes available for sale in June 2021.
WANT TO TRACK NEW HOME SALES? Check out the link below from the US Census Bureau. They update New Home Sale data monthly.
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0:00 Metric to Watch: New Home Sales
1:11 24% Decline in Home Sales
3:50 Why are Sales Declining? 2 Reasons…
5:52 13-Year High in Homes FOR SALE
7:58 False Narratives from Realtors & Builders
10:31 Home Prices v. New Home Sales
12:05 LEADING INDICATOR of the Market
13:22 Two Caveats to Consider
14:49 Want More Content?
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