Costs of New Homes Rise
Posted on June 26, 2006
Filed Under Home Mortgage, Mortgage Interest, Mortgage Rates, Mortgage Updates
Everyone has been predicting the real estate bubble bust but surprisingly the price of new homes is rising instead of falling. This number was shown in May and managed to surprise even those in the business.
The Commerce Department reported that sales of new single-family homes increased by 4.6 percent in May to a seasonally adjusted annual rate of 1.234 million units. The median price of homes sold did decline to $235,300, a drop of 4.3 percent from the April sales price.
Analysts are still looking for sales of both new and existing homes to fall by around 10 percent this year as rising mortgage rates crimp demand. The lowest mortgage rates in four decades helped to propel sales to five straight annual records.
The 4.6 percent increase in sales pushed the sales rate to the highest level since last December and followed increases of 5.9 percent in April and 7.3 percent in March. The previous months’ increases had been helped by unusually mild weather.
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