Sales of newly built, single-family homes in May increased 10.7%, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Existing-home sales retreated for the fourth consecutive month in May. Month-over-month sales declined in three out of four major U.S. regions, while year-over-year sales slipped in all four regions, according to the National Association of Realtors.
Rising interest rates and ongoing building material supply chain disruptions that raise construction costs continue to act as significant headwinds on the housing market.
According to a new report by the Harvard Joint Center for Housing Studies, the surge in the prices of gas, food, and other necessities are affecting housing affordability, especially now that most pandemic emergency government supports have ended.
Strong demand is still keeping multifamily developers fairly optimistic in many parts of the country, but high construction costs and their impact on affordability are making some developers increasingly cautious, NAHB said.
Home builders warn of current deteriorating conditions as a sharp jump in mortgage rates in March and April coupled with ongoing building material supply chain disruptions, labor shortages and high inflation drive up housing costs.