In May, new home sales fell almost 6%.

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The housing market is still struggling with a lack of availability and increasing costs.

According to estimates published on Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family homes dropped 5.9 % in May to 769,000. This compares to the amended April rate of 817,000, but this 9.2 % is more than the May 2020 estimate of 704,000. 

Meanwhile, the median price of a new house increased to $374,400.

The data comes on the heels of the National Association of Realtors report on existing houses, which showed that they dropped 0.9 percent in May to an annual pace of 5.8 million units, marking the fourth consecutive monthly fall.

The recent significant decrease in timber costs may bode well for homebuilders in the second half of the year — According to Ruben Gonzalez, a chief economist at Keller Williams.

“The drop in lumber prices was excellent news throughout the housing sector, and we have hopefully passed peak lumber pricing, and builders will be able to feel more confidence placing goods on the market with less cost uncertainty,” Gonzalez said.

“Right now, we see a lack of housing inventory as the main limiting factor for house sales as we enter the second half of the year,” Gonzalez said.

According to Senior Economist George Ratiu, a recent study showed that purchasers want bigger houses with home offices and that the majority of buyers intend to relocate away from their current city or town in pursuit of something more affordable. The real estate market, on the other hand, “is grappling with the gap between what consumers desire, what they can pay, and what’s available.”

For example, almost 60% of prospective purchasers want a house priced at about $350,000, while only around 44% of new homes are constructed in that price range.

“Even with (mortgage) rates staying around 3%, first-time buyers are running out of affordable choices,” he said.

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Hi, I am Vishnu, and I have been a blogger for more than 2 years now; and I will provide some knowledgeable current international news to my readers.

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