Millennials hunting for homes are driving prices up as builders scramble to meet demand.
New single-family home sales rose 13.9 percent in July from the previous month, reaching the highest annualized rate recorded by the Commerce Department since 2006, the Wall Street Journal reported. Single-family home starts, which indicates U.S. homebuilding, rose 8.2 percent from June to July, reaching the highest level since February.
Some of that was pent-up demand. But t hose who can work remotely have been able to save money during the pandemic by reducing travel, dining and entertainment expenses and cashing federal stimulus checks, and many are searching for homes with more space. That’s good news for builders, even as many service-economy workers have seen their incomes plummet.
While unemployment inches down after spiking to historic levels in April, a metric of U.S. home-builder confidence in August reached heights not seen since 1998. The same metric sank to an eight-year low in the spring, according to the National Association of Home Builders.
In response to the increased demand, home builders are hiking prices. The median sale price for a new home reached $330,600 in July, 7.2 percent more than it was a year earlier. Lumber prices have also risen because of a supply crunch, pushing the cost to build a new home up $16,000 since April. [WSJ] — Georgia Kromrei