Sales of newly built homes fell 4.7% in April compared to March and dropped 7.7% from the previous year, according to the U.S. Census.

March sales were also revised significantly lower.

Higher mortgage rates are affecting sales, with the average 30-year fixed mortgage rate rising from the high 6% range at the end of March to 7.5% in April, reducing affordability.

The median price of new homes sold in April was $433,500, up 4% from April 2023, primarily due to the sale of higher-end homes.

Builders face high costs for land, labor, and materials, preventing price reductions, CNBC has reported.

Larger builders like D.R. Horton and Toll Brothers reported strong earnings, benefiting from buying down mortgage rates and increased demand amid low resale market supply.

Written by B.C. Begley