The U.S. real estate market was one of the more unusual effects of the 2019 coronavirus disease (COVID-19) epidemic during the previous period of prosperity. But recent government and industry data show that U.S. housing market sales are slipping, blamed on the economic recovery and tight supply.
According to the data, sales of new homes and manufactured homes (mid-terraced homes) in the U.S. have begun to decline in April. Despite builders rushing to build to meet demand, home prices continue to climb, affecting sales.
Although the U.S. housing market is likely to stabilize in the coming months, analysts believe that the market boom will come to an end.
The latest evidence of a cooling U.S. housing market appeared today. The Commerce Department announced that new home sales fell 5.9 percent in April from March, blaming high home prices and tight supply.
A similar situation has emerged in the much larger middle market. The National Association of Realtors (NAR) reported last week that sales of mid-sized homes fell 2.7 percent in April, while the median sale price of such properties reached an all-time high.
In addition, consumer confidence data released today by The Conference Board showed that only 4.3 percent of U.S. consumers surveyed this month expect to purchase a home in the next six months, a decline of 3 percentage points from the April survey.
In response to the U.S. mid-home market, Rubeela Farooqi of HighFrequency Economics noted that higher home prices combined with the epidemic’s easing may have prompted homeowners to come to the market to sell their homes.
“Even so, until the supply crunch eases, issues such as lack of objects or homebuyers’ fears of not being able to afford them are likely to continue to create headwinds for the housing market.”
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