According to Census Bureau’s data, new home sales in the U.S. dropped by 8.1 percentage points in June, dropping to their lowest level since April 2020. The report comes on the same day as new statistics reveal July’s consumer confidence also fell more than expected.
As noted by Newsweek, “sales of new single-family homes had seen a modest increase in May after a slump in April, when purchases of new single-family homes dropped by 16.6 percent month-on-month to reach their lowest level since April 2020, in the midst of the COVID-19 pandemic.”
The Census Bureau’s data also shows that home sales are dropping at the same time as mortgage rates, interest rates and home prices are rising in the U.S., “making the purchase of new (and existing) homes unaffordable for many—especially first-time buyers,” Newsweek reported.
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July’s consumer confidence also dropped to its lowest since February 2021, according to the Conference Board’s index released on Tuesday. The index decreased by 95.7 from 98.4 in June, falling for a third consecutive month.
Among the factors contributing to the decrease in spending power of potential home buyers are growing inflation and a looming cost-of-living crisis which is profoundly impacting consumers’ wallets and chipping away at their investment.
Economist and financial commentator Peter Schiff, the CEO and chief global strategist of Euro Pacific Capital told Newsweek that the release of the two data shows that “the economy is clearly in #recession.”
Read more at Newsweek.
