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US new home sales drop sharply in March

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New home sales slowed last month as US buyers increasingly are priced out of the market./AFP
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Apr 27, 2022 - 09:42 AM

WASHINGTON — Sales of new homes fell in the United States last month, government data said Tuesday, as high prices continued to crimp demand.

Sales dropped to an annualized rate of 763,000, seasonally adjusted, less than analysts anticipated and 8.6 percent below the rate in February, which was revised sharply upwards, the Commerce Department reported.

Prices continued to climb, with the median sales price reaching $436,700, not seasonally adjusted, though as sales slowed supply increased to 5.7 months at the current pace.

After booming during the worst periods of the Covid-19 pandemic, real estate sales have slowed across the United States since buyers cannot find available homes and many cannot afford those on the market, as the Federal Reserve is raising borrowing costs to fight inflation.

“We expect new home sales to lose more momentum as we move further into 2022,” Nancy Vanden Houten of Oxford Economics said.

“Demand may remain strong, but high home prices and the spike in mortgage rates since the end of 2021 — which have increased by a record amount in a compressed period of time — will price some buyers out of the market.”

All regions reported slower sales last month, with the South seeing the biggest drop of 10.2 percent, the Midwest dropping 8.7 percent, the West reporting a decrease of six percent and the Northeast falling 5.4 percent.

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