, and new home sales are a leading indicator for the sector as they are counted at the signing of a contract.The 30-year fixed-rate mortgage jumped above 5% in April for the first time since February 2011, according to data from mortgage finance agency Freddie Mac. It has surged, averaging 5.
Despite signs that demand for housing is slowing, a record shortage of homes will likely limit the decline in sales. The moderation in sales gains could allow supply to increase and slow double-digit price growth. The median new house price in April soared 19.6% from a year ago to $450,600. Nearly all the houses sold last month were above the $200,000 price level. There were 444,000 new homes on the market at the end of April, up from 410,000 units in March. Houses under construction made up roughly 65% of the inventory, with homes yet to be built accounting for about 27%.
The backlog of homes approved for construction but yet to be started is at an all-time high as builders struggle with shortages and higher prices for inputs like lumber for framing, as well as cabinets, garage doors, countertops and appliances. At April’s sales pace it would take 9.0 months to clear the supply of houses on the market, up from 6.9 months in March.
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