Despite the fact that mortgage applications for new home purchases fell in July, analysis showed that July 2021 was the second-strongest July for new home mortgage applications since 2012. As a result, new home sales were basically the same as they were in June.
That stability is an improvement compared to June, which saw new home sales fall by 6.6%. June was also the third straight month that new home sales declined.
That three-month streak ended in July, as new data from the Census Bureau and the Department of Housing and Urban Development shows that sales of newly built, single-family homes increased by 1% in July over June’s upwardly revised figures.
The small increase in sales shows that new home sales have “leveled of this summer after a period of rising costs and strong demand,” according to National Association of Home Builders Chairman Chuck Fowke.
New home sales also continue to run ahead of last year, but NAHB Chief Economist Robert Dietz cautioned that July 2021 ran well behind the same month in 2020.
“While new home sales are up 6.9% on a year-to-date basis, they are down 27% in July compared to the same time last year,” Dietz said. “Builders will need to watch local home prices relative to incomes, given recent gains in building materials and other construction costs.”
NAHB also noted that for-sale inventory of new homes is continuing to rise, which should help new home sales continue to increase over the coming months.
Per the Census and HUD data, there were 367,000 new single-family homes for sale at the end of July. According to NAHB, that means that new home inventory was 26.1% higher in July 2021 than it was in July 2020.