I might actually be able to afford a home in 2 years.
Sales of new single-family are down 16.6 percent to 591,000 in April after a downward revision to 709,000 in March. Sales are the lowest since 582,000 in April 2020 during the worst of the pandemic downturn and since 550,000 in December 2018. The level is well below expectations in Econoday survey where the consensus is 750,000 and the low end of the range at 700,000.
The months' supply of new homes available for sale jumped to 9.0 in April after 6.9 in March and nearly twice the 4.7 in April 2021. April is the highest since 9.3 months' worth in May 2010.
Despite slower sales and more plentiful inventories, the median price of a new home rose 3.6 percent to $450,600 in April from March and is up 19.6 percent from a year earlier.
It is clear that rising prices and mortgage interest rates have substantially reduced home affordability. Early May data for homebuilders and mortgage applications strongly suggest that the housing market is cooling rapidly. The boom brought on by historic lows in mortgage rates and by changing housing needs during the pandemic, and later by rising incomes and rental costs is pretty much over. Homebuyers can expect an easing in price escalation and less competition for available units. It is unlikely, though, that prices are going to change course.
Note that today's report includes annual revisions back through January 2017.
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