Sales of new homes tanked in May, pushing supply up to a 3-year high

[mahatmakanejeeves]

Source: CNBC

Real Estate
Sales of new homes tanked in May, pushing supply up to a 3-year high

PUBLISHED WED, JUN 25 202510:48 AM EDT UPDATED 44 MIN AGO
Diana Olick
@IN/DIANAOLICK
@DIANAOLICKCNBC
@DIANAOLICK

KEY POINTS
-- Sales of new single-family homes dropped 13.7% in May compared with April, according to the U.S. Census.
-- Homebuilders who reported quarterly earnings recently noted high rates cutting into affordability.
-- The average rate on the 30-year fixed mortgage hovered around 7% for much of May, according to Mortgage News Daily.

Sales of new single-family homes dropped 13.7% in May compared with April to 623,000 units on a seasonally adjusted, annualized basis, according to the U.S. Census. ... That sales total was 6.3% lower than May 2024 and well below both the six-month average of 671,000 and the one-year average of 676,000. It also lags the pre-pandemic average in 2019 of 685,000 units sold. ... Wall Street analysts were expecting May new home sales of 695,000, according to estimates from Dow Jones.

This count is based on signed contracts, so people out shopping in May, when mortgage rates remained stubbornly high. ... The average rate on the 30-year fixed mortgage started May at 6.83%, rose steadily to just over 7% and then settled back at 6.95% by the end of the month, according to Mortgage News Daily.

“The large fall in new home sales in May cancels out all of the positivity of the past couple of months and serves as a valuable reminder that buyer activity can only rise so far with mortgage rates hugging 7%,” wrote Bradley Saunders, an economist at Capital Economics.

{snip}

Read more: https://www.cnbc.com/2025/06/25/may-2025-new-home-sales.html

[Bernardo de La Paz]

1. It cannot be explained as only due to mortgage rates, which haven't changed enough. . . . nt

[enid602]

2. flippers

And how many of those homes that DID sell were sold to corporations and flippers?

[WSHazel]

6. PE Buyers are struggling

PE firms flooded the single family home market because the Trump tax bill made it cheaper for PE to buy a house than it was for an individual to do it. Now PE has a problem, because there are not enough buyers and the PE firms are sitting on a lot of inventory. I am not sure how this will play out.

[mwmisses4289]

3. Doesn't help that the average home price is somewhere around $300,000.

That puts most homes out of reach for many Americans. Add in stagnant wages, increasing prices for everything, political instability, Job layoffs....people aren't willing to lay out a chunk of change for a house right now.

[sdfernando]

11. I sold my house in preparation for moving out of the country

I'm glad I didn't wait. It took 56 days from the time I put it on the market until I got the funds deposited into my bank account. I am lucky I live in San Diego, CA and the market is always stronger than most of the rest of the nation, but even here I'm seeing inventory increase so it is changing from a sellers market to a buyers....and who knows how bad it might get. Anyway, I'm glad I didn't wait.

[Mawspam2]

4. People know Trump's tariff taxes haven't fully hit yet.

All sales are down. I know I have stopped all large purchases. I bought my last ever car after the election and before the inauguration, knowing what was coming.

[WSHazel]

5. Homes are overpriced

They have had a huge run up since pre-Covid, and the market can't sustain it. Buyers are waiting because there is more supply than demand, especially when you include the pent up supply from aging boomers. Prices will adjust.

[valleyrogue]

13. They have been overpriced for fifty years.

The real estate industry started jacking up the prices of houses in the mid-1970s, thanks to the influx of married women into the labor force. Two incomes, the industry reasoned, more profit by raising the prices.

The industry hadn't counted on stagnating wages and such, but, as long as there were two incomes to "buy" a house, that was okay.

Meanwhile, single adults for the most part cannot afford to break into the market-especially never-married women. Divorced and widowed women are often lumped in as "single" when news reports tout all the "single" women buying houses or qualifying to buy them. The great majority of women have to get married--trade sex with a man for financial support--in order to break into the market or else come into an inheritance.

[intheflow]

7. Maybe I will be able to afford a house, after all.

I sold my house in 2001 to move across the country for grad school. Have not been able to find anything affordable (that's habitable) even though I'm making about twice what I made then. Been waiting for this bubble to burst.

[msongs]

8. and here I thought no sales means the price is too high and should be lowered lol nt

[BurnDoubt]

9. Greatification Is HERE. Don't mind our noise and dust.

Next: Austerity Kills Incomes. The Cost Of Living skyrockets. Kleptobros buy up properties at fire-sale prices. You rent from them spending cash.
It's a Plan. They planned to Fuck you. Pretend you like it.

[RussBLib]

10. A 7% rate is not all that high, historically speaking

We bought a house with a 21% rate back in 1982, then refinanced it several times to get it eventually down to 9%, and we were happy to pay it. If people need a house, they will buy, pretty much regardless of the rate.

I think the hindrance these days is all of the uncertainty put out there by the orange parasite.

Then again, you know what they say: past performance is no guarantee of future results.

https://russblib.blogspot.com/?m=1

[Jughead]

12. What it is?

Consumer confidence maybe?

[leftyladyfrommo]

14. Higher taxes and sky high insurance are putting

a lot of people put of the market. My actual principal and interest is about $250. My total payment is $633. It may eventually make me sell.