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Economic Report: New home sales plunge as high prices and rising mortgage rates discourage buyers

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The Numbers: Sales of new homes in the U.S. fell in April to the lowest level during the pandemic owing to high prices, soaring mortgage rates and a lack of homes for sale.

New sales slowed to a 591,000 annual rate from 709,000 in the prior month, the government said Tuesday. That’s how many homes would change hands in a full year if the number of sales were the same in every month as they were in April.

Economists polled by The Wall Street Journal had forecast sales to take place at a 750,000 annual rate.

While sales fell far short of forecast, the report is sometimes quite volatile and subject to large revisions.

Still, the dropoff in sales dovetails with other industry reports on the housing and suggest that both high inflation and higher interest rates are dampening economic growth.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.96%

and S&P 500
SPX,
-1.99%

fell in Tuesday trades.

Coronavirus Update: FDA panel to review Pfizer and Moderna vaccines for children aged six month to 4 years on June 15

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