There was a 1.1% drop in supply of newly built homes in the second quarter compared to the previous quarter, the largest drop since the first quarter of 2013.
According to Redfin, sales were up 0.8% in Q2 2019 following two consecutive quarters of lower sales, while existing home sales dropped 0.7% in the quarter; while prices held steady, bucking the trend for the median sales price for existing homes which rose 3.2% to $309,700.
The diverging trends between new and existing home markets was also seen in supply, with existing homes increasing by 1.1%, a mirror image of the new home percentage.
"The moderation we're seeing in new-home prices was expected and follows right along with our observation late last year that builders were finally shifting their focus toward offering smaller, more affordable homes," said Redfin chief economist Daryl Fairweather. "While this change was a clear and long-needed response to homebuyer demand and tastes amid an affordability crisis and a softening market, it also means that builders are now focused on homes that are less profitable for them.”
He added that the less favorable market is likely to mean that supply of new homes continues to stay low overall although low mortgage rates and more affordable prices could boost sales in the coming months.
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