New Home Sales Plummet as Mortgage Rates Soar

Sales of newly built homes in the US dropped by 8.7% in August compared to July, reaching the slowest pace since March, according to the US Census Bureau. The decline can be attributed to a sharp increase in mortgage rates, which reached 7.48% by the end of August. Homebuilders have been lowering prices and offering incentives to offset rising interest rates and limited affordability. The median price of a newly built home sold in August was $430,300, a 2% drop from the previous year. Builder sentiment also dropped in September, with more builders reducing prices as high mortgage rates impact buyer confidence and demand.