Surprise: sales of new homes up

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Everyone has predicting that home sales would plummet due to rising interest rates, but in May new home sales increased. Analysts have been expecting big declines, but instead:

The Commerce Department reported that sales of new single-family homes increased by 4.6 percent in May to a seasonally adjusted annual rate of 1.234 million units. The median price of homes sold did decline to $235,300, a drop of 4.3 percent from the April sales price.

Interest rates are bound to have their effect at some point. The Northeastern part of the US saw a decline in houses, so some are already feeling the pinch there.

One other factor bound to keep home prices dropping: there’s a huge backlog of unsold homes. Too much supply is bound to make houses cheaper. If you’re a bargain hunter and patient, you will probably able to score some great deals in the next few years in certain parts of the country.

Building is still going relatively strong in the South and West, but numbers suggest a slowdown.

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