Lacklustre conditions weigh on U.S. resale, new home markets
It noted that housing starts were up nearly five per cent month over month in June, mostly driven by multi-family activity, up nearly 30 per cent month over month. Single-family home starts, however, fell about five per cent.
At the same time, resales declined nearly three per cent month over month, led by single-family home sales, falling three per cent. Inventory, while down almost one per cent from May, were up nearly 16 per cent year over year.
Home prices saw a modest gain in June, up two per cent year over year. TD noted that activity in resales was 'tepid amid low affordability due to high mortgage rates and home prices.'
Falling demand and higher inventory could help ease price pressures, but a turnaround to more favourable conditions leading to higher demand appears unlikely until mortgage rates come down, it added.
Rates are currently averaging about seven per cent in the U.S. holding back home buying and refinancing. Conditions are also weighing on new home construction with starts at five-year lows. High mortgage rates are also affecting new builds for ownership, it added. As well, economic uncertainty due to trade, tariffs and inflation in the U.S. are affecting demand, confidence and rates. In turn, many prospective buyers are sitting on the sidelines.
Consequently, supply of new homes for sale reached in June their highest levels since 2007.
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