Business is booming.

US mortgage rates hit new heights as economy defies expectations

The Census Bureau reported Wednesday that new home sales were at a seasonally adjusted annual pace of 714,000 in July – up 4.4% from the revised June 2023 estimate of 684,000 units.

Read more: Housing shortage fuels new home sales in July

“Despite high mortgage rates and elevated pricing, new home sales have less competition from resales, allowing them to outperform due to the scarcity of available housing,” explained Kelly Mangold, principal at RCLCO Real Estate Consulting. “Motivated buyers continue to seek homes with space for home offices, growing families, and outdoor space – and as the summer draws to a close, many have found what they are looking for in the new home market.”

Builder incentives are also boosting new home sales, according to First American deputy chief economist Odeta Kushi.

“A builder will do what’s necessary to sell their inventory, including offer incentives,” she said. “Those incentives can come in the form of mortgage rate buy-downs, paying points for buyers and offering price reductions. They can also offer upgrades on appliances and other interior quality features.”

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