February Home Sales Down on Rising Material Costs, Interest Rates
Higher interest rates, supply shortages and rising material prices, particularly for lumber, put a damper on new home sales in February. Sales of newly built, single-family homes fell 18.2 percent to a 775,000 seasonally adjusted annual rate, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the lowest level since last May.
"Though buyer traffic remains strong, some home building activity is being delayed due to material shortages," said Chuck Fowke, chairman of the National Association of Home Builders and a custom home builder from Tampa, Florida. "This is forcing builders and buyers to grapple with rising affordability issues, as soaring lumber prices have added more than $24,000 to the price of a new home."