Contracts to purchase new homes fell by -2.5% vs an estimate of a 0.5% gain. Higher rates and low inventories are being blamed for the decline according to the National Association of Realtors. The rising interest charges are outpacing the impact from higher wages. The NAR points out that the inventory of lower priced starter homes are simply not available which pushes up prices in that sector and makes home buying less affordable.
The NAR adds that:
- YoY (NSA) increased by 1.4%
- Home sales fell in 3 of the 4 US regions on a MoM basis.
Purchases in the west declined by 6.7%. This was the largest decline since July 2013.
In the Midwest the decline was 2.5% - the lowest since January.
The South fell by 1.2% to the weakest since September 2014.
The Northeast was up 0.6%