Heavy Discounts Boost US Home Sales
New home sales in the US increased in June for the first time in three months. Purchases of single-family homes rose 1.6% to an annual rate of 628,000 units.
This figure exceeded economists' estimates of 607,000 units. The sales increase occurred despite persistently high mortgage rates and weak consumer sentiment.
Demand was primarily driven by developers offering discounts, sales incentives, and rebates. These measures were taken to attract buyers amidst a still-challenging property market.
The median price of a new home fell 2.7% year-over-year to US$398,300. The decline indicates developers are increasingly aggressively adjusting prices to boost sales.
Despite the improving sales, developer sentiment has fallen again to its lowest level this year. Several construction companies have also begun to slow construction due to the continued oversupply of homes on the market.
The inventory of new homes fell 3.2% year-over-year to 485,000 units, equivalent to 9.3 months of demand. Sales have the potential to be supported by discounts, but high borrowing costs and weak consumer confidence remain major risks. (arl)
Source: Newsmaker.id
