LOS ANGELES (AP) — Homebuilders who bucked the worst of last year’s housing slump may be seeing their luck run out.
After showing signs of strengthening early this year, sales of new U.S. homes fell in April and May from a year earlier by 7.7% and 16.5%, respectively.
Last month's sales skidded to a seasonally adjusted annual rate of 619,000 units, the slowest pace since November, the U.S. Census Bureau reported Wednesday.
The average rate on a 30-year mortgage has mostly hovered around 7% this year, according to mortgage buyer Freddie Mac. The elevated rates have discouraged many home shoppers. Sales of previously occupied U.S. homes, which make up by far the largest swath of the housing market, fell in May for the third month in a row.
The recent slowdown in new home sales marks a shift from last year, when sales rose nationally for the first time in two years, climbing 4.2% from a year earlier. By comparison, sales of previously occupied U.S. homes sank roughly 19% to a nearly 30-year low.
As last year, homebuilders have lowered prices and offered incentives like paying to lower the rate on home loans in hopes of mitigating the impact of elevated mortgage rates.
Homebuilders such as Miami-based Lennar and Los Angeles-based KB Home have increasingly relied on such financial incentives to woo buyers this year as mortgage rates have remained elevated. They helped drive a 19% year-over-year increase in Lennar’s new home orders rose in the March-May quarter. KB Home posted a 2% increase in the same period
“But for some homebuyers, those financial incentives are no longer enough to get them on the building lot,” said Lisa Sturtevant, chief economist at Bright MLS.
This spring’s ramp-up in mortgage rates, which limits homebuying budgets, and the lingering uncertainty over when rates may come down, have put off many home shoppers.
Still, these trends favor those who can afford to finance a home purchase at current mortgage rates or pay all cash.
For one, there are more new homes available. The available inventory at the end of last month amounted to a 9.3-month supply, going by the current sales pace. That’s the highest months’ supply of new homes for sale since October 2022.
Builders are also slowing the pace of new home construction. Single-family housing starts declined in May for the third straight month to the slowest pace since October.
Another plus for homebuyers: Easing home prices. The median sale price of a new home fell 0.9% in May from a year earlier to $417,400.
“With more housing inventory and softening demand, expect the third quarter of 2024 to be a slower new housing market than the second half of 2023,” Sturtevant said.
FILE - Workers toil on new homes in a housing development Tuesday, June 25, 2024, in Loveland, Colo. After showing signs of strengthening early this year, sales of new U.S. homes fell in April and May from a year earlier by 7.7% and 16.5%, respectively. (AP Photo/David Zalubowski, File)
PARIS (AP) — Voters across mainland France began casting ballots Sunday in the first round of an exceptional parliamentary election that could put France’s government in the hands of nationalist, far-right parties for the first time since the Nazi era.
The outcome of the two-round election, which will wrap up July 7, could impact European financial markets, Western support for Ukraine, and how France’s nuclear arsenal and global military force are managed.
Many French voters are frustrated about inflation and economic concerns, as well as President Emmanuel Macron’s leadership, which they see as arrogant and out-of-touch with their lives. Marine Le Pen’s anti-immigration National Rally party has tapped and fueled that discontent, notably via online platforms like TikTok, and dominated all preelection opinion polls.
A new coalition on the left, the New Popular Front, is also posing a challenge to the pro-business Macron and his centrist alliance Together for the Republic.
There are 49.5 million registered voters who will choose 577 members of the National Assembly, France's lower house of parliament, during the two-round voting.
After a blitz campaign marred by rising hate speech, voting began early in France’s overseas territories, and polling stations opened in mainland France at 8 a.m. (0600 GMT) Sunday. The first polling projections are expected at 8 p.m. (1800 GMT), when the final polling stations close, and early official results are expected later Sunday night.
In the restive French Pacific territory of New Caledonia, polls already closed at 5 p.m. local time due to an 8 p.m.-to-6 a.m. curfew that authorities on the archipelago have extended until July 8.
Nine people died during a two-week-long unrest in New Caledonia, where the Indigenous Kanak people have long sought to break free from France, which first took the Pacific territory in 1853. Violence flared on May 13 in response to attempts by Macron’s government to amend the French Constitution and change voting lists in New Caledonia, which Kanaks feared would further marginalize them.
Voters in France’s other overseas territories from Saint-Pierre-et-Miquelon, Saint-Barthélemy, Saint-Martin, Guadeloupe, Martinique, Guyana, French Polynesia and those voting in offices opened by embassies and consular posts across the Americas cast their ballots on Saturday.
Macron called the early election after his party was trounced in the European Parliament election earlier in June by the National Rally, which has historic ties to racism and antisemitism and is hostile toward France’s Muslim community. It was an audacious gamble that French voters who were complacent about the European Union election would be jolted into turning out for moderate forces in a national election to keep the far right out of power.
Instead, preelection polls suggest that the National Rally is gaining support and has a chance at winning a parliamentary majority. In that scenario, Macron would be expected to name 28-year-old National Rally President Jordan Bardella as prime minister in an awkward power-sharing system known as "cohabitation."
While Macron has said he won’t step down before his presidential term expires in 2027, cohabitation would weaken him at home and on the world stage.
The results of the first round will give a picture of overall voter sentiment, but not necessarily of the overall makeup of the next National Assembly. Predictions are extremely difficult because of the complicated voting system, and because parties will work between the two rounds to make alliances in some constituencies or pull out of others.
In the past such tactical maneuvers helped keep far-right candidates from power. But now support for Le Pen's party has spread deep and wide.
Bardella, who has no governing experience, says he would use the powers of prime minister to stop Macron from continuing to supply long-range weapons to Ukraine for the war with Russia. His party has historical ties to Russia.
The party has also questioned the right to citizenship for people born in France, and wants to curtail the rights of French citizens with dual nationality. Critics say this undermines fundamental human rights and is a threat to France's democratic ideals.
Meanwhile, huge public spending promises by the National Rally and especially the left-wing coalition have shaken markets and ignited worries about France's heavy debt, already criticized by EU watchdogs.
Follow AP's coverage of elections at https://apnews.com/hub/global-elections
A woman walks past campaign boards for the upcoming parliamentary elections in Paris, Thursday June 27, 2024. Voters will choose lawmakers for the National Assembly in two rounds on June 30 and July 7. (AP Photo/Christophe Ena)
People gather on the Republique Plaza during a rally in Paris, Thursday June 27, 2024. Anti-racism groups joined French unions and left-wing coalition in protests against the surging nationalist far right as French President Emmanuel Macron called snap elections following the defeat of his centrist alliance at European Union elections earlier this month. (AP Photo/Christophe Ena)
FILE - Jordan Bardella, president of the far-right National Front party, arrives at the Eurosatory Defense and security exhibition, Wednesday, June 19, 2024 in Villepinte, north of Paris. The perspective of a defeat in parliamentary elections mean he may have to share power with a prime minister from rival political party — that could possibly be far-right National Rally's president Jordan Bardella. Macron defeated twice the National Rally's leader Marine Le Pen in the presidential election, both in 2017 and 2022.( AP Photo/Michel Euler, File)
FILE - French President Emmanuel Macron, right, meets French far-right Rassemblement National (National Rally) leader Marine Le Pen at the Elysee Palace on June 21, 2022 in Paris. The perspective of a defeat in parliamentary elections mean he may have to share power with a prime minister from rival political party — that could possibly be far-right National Rally's president Jordan Bardella. Macron defeated twice the National Rally's leader Marine Le Pen in the presidential election, both in 2017 and 2022. (Ludovic Marin/Pool photo via AP, File)
