Discover the National Association of Home Builders of the United States new updates regarding the hike of the mortgage rates.

Update From The National Association of Home Builders of the United States: As Mortgage Rates Increased, Sales Of New Homes Declined In August (Photo: Le Monde)

The National Association of Home Builders of the United States has released a new study that shows new single family home sales decreased in August as the average mortgage rate climbed beyond 7%.

The report by National Association of Home Builders of the United States which is based on information from the Housing and Urban Development Department and the Census Bureau, shows that sales of newly constructed single-family houses fell 8.7% in August to a 675,000 seasonally adjusted annual rate from an upwardly revised July figure. 

However, compared to a year ago, new house sales increased by 5.8% in August.

According to a recent article by Kiplinger, a lack of existing homes for sale has led consumers to look for new construction.

READ ALSO: Survivor Urges Action As Prostate Cancer Awareness Month Concludes

Update about home sales as per the National Association of Home Builders of the United States

According to Robert Dietz, chief economist for National Association of Home Builders of the United States, sales declined in August as a result of mortgage rates that were on average above 7%. 

In August, there were 436,000 new single family homes on the market, a 5.2% decrease from the same month last year. According to National Association of Home Builders of the United States, newly constructed homes made up an increased share of 31% of the overall housing inventory in August which includes both new and resale homes and they accounted for roughly 16% of all home sales.

According to Alicia Huey, National Association of Home Builders of the United States chair and a custom house builder and developer from Birmingham, Alabama, builders are still battling supply-side issues in a market with low levels of housing affordability. 

In addition to pricing out demand, as was the case in August, higher interest rates also raise the cost of financing for builder and developer loans, creating yet another barrier for construction.

According to National Association of Home Builders of the United States, builder incentives and a trend toward building slightly smaller houses are the main reasons why the median sale price of a new home dropped by about 2% to $430,300 in August from a year earlier.

READ ALSO: Georgian President Salomé Zourabichvili Warns Of Russian Threat To Baltic States