Consumer Sentiment Continues to Slide, Despite Softening Inflation
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August 22, 2024For months, the story around the U.S. real estate market has been all about supply and demand. Once more homes are built, the market will stabilize and sales will pick up.
That was half right.
As of the end of June, the inventory of available new homes for sale rose to its highest level since 2008, with enough supply to last for 9.3 months. For comparison, at the height of the buying frenzy in 2021, there was just over 1.5 months of supply available.
There are plenty of new homes out there to buy – and the median sales price has leveled off at around $417,000 – but sales fell by 0.6% in June to a 617,000 annual rate, marking a seven-month low.
As with everything in real estate, there were some regional variations. Sales declined in the Midwest and Northeast, while slightly increasing in the South and West.
But all of this paints a picture of a U.S. consumer who is increasingly cautious to make large investments in things like homes and cars. Even as the housing market begins to open up, we aren’t seeing the flood of new buyers that would otherwise be expected, signaling that economic conditions on the ground might not be as positive as they look.
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