WASHINGTON – New home purchases dropped in April as buyers continued to be deterred by high mortgage rates and prices and a short supply.
Sales of new single-family houses were at a seasonally adjusted annual rate of 634,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). This is 4.7% below the revised March rate of 665,000 and is 7.7% below the April 2023 estimate of 687,000. The median sales price of new houses sold in April 2024 was $433,500. The average sales price was $505,700, the Census Bureau said.
The National Association of Home Builders (NAHB) said housing affordability continues to be problematic across the country.
The NAHB/Wells Fargo Cost of Housing Index found in the first quarter of 2024, 38% of a typical family’s income was needed to make a mortgage payment on a median priced new single-family home. Low-income families, defined as those earning only 50% of the area’s median income, would have to spend 77% of their earnings to pay for the same new home.
The figures track closely for the purchase of existing homes in the U.S. as well, the NAHB said.
A typical family would have to pay 36% of their income for a median-priced existing home while a low-income family would need to pay 71% of their earnings to make the same mortgage payment.
NAHB/Wells Fargo data found the Naples-Marco Island area to be among the top 5 most severely cost-burdened markets in the country. HUD defines cost-burdened families as those that pay more than 30% of their income for housing and a severe cost burden is defined as paying more than 50% of a household income on housing. The Naples-Marco Island area comes in at 71%, the NAHB said.
“With a nationwide shortage of roughly 1.5 million homes, the lack of housing units is the primary cause of growing housing affordability challenges,” said NAHB Chief Economist Robert Dietz. “Policymakers at all levels of government need to enact policy changes that will allow builders to construct more homes, such as speeding up permit approval times, providing resources for skilled labor training and fixing building material supply chains.”
Source: National Association of Home Builders (NAHB)
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