US New Home Sales Drop in April as Mortgage Rates Rise
US New Home Sales Decline in April Amid Higher Mortgage Rates
Sales of new U.S. single-family homes fell 6.2% in April to a seasonally adjusted annualized rate of 622,000 units, as the boost from better weather faded and mortgage rates remained elevated, according to the Commerce Department.
Factors Behind the Slump
After a rebound in February and March following winter storms, sales weakened again in April. The average rate on the 30-year fixed-rate mortgage rose from 5.98% in late February to 6.46% in early April, averaging 6.30% by month-end.
Regional Variations and Inventory
Sales dropped in the Northeast, South, and Midwest but increased in the West. New housing inventory rose to 489,000 units in April from 481,000 in March. At the current sales pace, it would take 9.4 months to clear the supply.
Prices and Economic Impact
The median new house price increased 2.2% year-over-year to $422,500 in April. Most homes sold were in the $300,000-$799,999 range. Residential investment has contracted for five consecutive quarters.
Impacted Symbols
Symbols affected by this headline and their sentiment signals
Fannie Mae
Fannie Mae is similarly negatively affected by higher mortgage rates and falling home sales; rising rates and lower sales volume could pressure the company's profitability.
Freddie Mac
Freddie Mac, as a mortgage liquidity provider, is directly impacted by higher interest rates and declining home sales; rising rates and falling sales could negatively affect its revenues.
The news, analyses, and comments on this platform do not constitute investment advice. When making investment decisions, you should conduct your own research and consult with a qualified financial advisor if necessary. FiNews cannot be held responsible for any losses that may arise from the use of this information.
More Headlines
Tokyo Core Inflation Slows, Remains Below BOJ Target
Tokyo Core Inflation Slows, Remains Below BOJ Target
…Nikkei May Rise on Hopes for U.S.-Iran Peace Deal
Nikkei May Rise on Hopes for U.S.-Iran Peace Deal
…Australian Pension Fund HUB24 Faces Regulatory Scrutiny
Australian Pension Fund HUB24 Faces Regulatory Scrutiny
…