US home prices fall for the first time in a decade

First modification: 09/28/2022 – 05:36

This is the first price drop in US real estate in a decade.

In at least 20 large cities in the country, the prices of new homes fell by up to 0.44% in July compared to the previous month, a phenomenon that comes after the drastic tightening of monetary policy by the Federal Reserve with its third consecutive increase in interest rates last week.

Experts explain that apart from the rise in interest rates as one of the reasons for this phenomenon, the increase in mortgage rates this year also helped devalue many buyers and, in turn, caused sales to fall.

With little demand for real estate purchases, prices in the sector fell, but some time later the United States Department of Commerce announced that in August sales of new homes shot up 28.8% compared to the immediately previous month.

According to the entity, this increase has been the maximum since June 2020 and is due to the fact that “sales increased in the Northeast (66.7%), the Midwest (16.7%), the South (29.4 %) and the western US (27.5%).”

There were 461,000 new homes on the market at the end of last month, up from 459,000 units in July.

Sales were even higher than authorities had estimated. 500,000 houses were expected to be sold in August compared to July and, instead, 685,000 houses were sold in this period.

In August, 1,575,000 units began to be built, compared to 1,404,000 in July, where the estimated price of a home in the eighth month of the year was USD 436,800, an increase of 8.04%, compared to last year.

With AP, Reuters and local media