Steel Markets

Surging Prices Hurt New Home Sales
Written by David Schollaert
April 28, 2022
Sales of new single-family homes fell 8.6% in March compared to the month prior because buyers were deterred by higher prices.
The sticker shock results largely from supply chain disruptions and rising mortgage rates.
The seasonally adjusted rate in March was 763,000, down an even steeper 12.6% compared to March 2021, the US Department of Housing and Urban Development and the US Census Bureau reported.
“Growing affordability challenges are slowing new home sales and taking a toll on the housing market,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “Mortgage rates jumped nearly a full percentage point between the end of February and March, and builders continue to face escalating construction and development costs – which are putting upward pressure on new home prices.”
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction, or completed. In addition to adjusting for seasonal effects, the March reading of 763,000 units is the number of homes that would sell if this pace continued for the next 12 months.
Regionally, new home sales were mixed in March. In the Northeast, they were up by 10.5% from the previous month, and new home sales also increased by 8.5% in the West.
But those gains were offset by sales in the South falling by 13.9% and those in the Midwest dropping by 9.2%.
“Buyers are facing sticker shock due to deteriorating affordability conditions and a lack of existing home inventory,” said Danushka Nanayakkara-Skillington, NAHB’s assistant VP of forecasting and analysis. “Only 14% of new home sales in March were priced below $300,000. A year ago, it was 34%.”
Higher home prices and rising mortgage rates are sidelining potential buyers. The median sales price of a new home surged 21% from a year ago, reaching $436,700 in March – a 9% jump month-on-month.
The inventory of new houses for sale at the end of March was an estimated 407,000, a whopping 52.4% above the same year-ago period – a 6.4-month supply at the current sales rate. Just 35,000 of those homes, however, are completed and ready to occupy.
By David Schollaert, David@SteelMarketUpdate.com

David Schollaert
Read more from David SchollaertLatest in Steel Markets

Hot-rolled sources say demand continues to dwindle, prices feel arbitrary
Genuine demand, they stated, will return when the market feels stable again.

FabArc Steel Supply completes projects in Mississippi, Georgia
FabArc Steel Supply announced this week the completion of two large-scale projects in Georgia and Mississippi.

Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.

Worldsteel: Global steel demand flat, but modest rebound forecast for 2026
The World Steel Association (worldsteel) Short Range Outlook for global steel demand predicts that 2025’s steel demand will clock in at the same level as in 2024. In its October report, the Brussels-based association stated that this year’s steel demand will reach ~1,750 million metric tons (mt). The organization forecasts a 1.3% demand rebound in 2026, pushing […]

CRU: China’s indirect steel exports find new destination markets
The boom in China’s direct steel exports has not stopped this year, even with a rise in protectionist measures globally. The increase is driven by...