A recent report from the North State Building Industry Association showed a decline of new home sales within the Central Valley through May. Across the Yuba-Sutter area, only 20 new houses were sold last month.
The Building Industry Association released data showing the amount of new houses sold by each county in the greater Sacramento region. A total of 357 new homes were sold across Sacramento, Placer, El Dorado, Yolo, Yuba, Sutter and Amador counties. When compared to previous sales reports, this is the lowest amount of overall new home sales since April 2020.
After the first month of the COVID-19 pandemic, the Building Industry Association reported a total of 275 new sales across the Central Valley. Still, 24 new homes were sold in Yuba-Sutter during this time. One month later, the association reported 58 new home sales in the area and a total of 464 new sales across the Central Valley.
The May 2022 sales report indicated the end of a two-year rebound for the local housing market.
Association President and CEO Michael Strech said that rising mortgage interest rates play a major factor in the decline of new home sales.
“While interest rates remain below historical averages, the uptick this year has clearly had an impact,” Strech said in a statement.
Strech also attributed high interest rates to reluctant attitudes from potential buyers. Those in the housing market may take a “wait-and-see” approach to gain a better understanding of where the market will fall at a later time, Strech said.
Compared to the association’s April 2022 report, the total number of new home sales for Yuba-Sutter have fallen by over half. Within one month, sales for the region dropped from 46 to 20.
Other declines can be seen in Sacramento and Placer counties. The association saw 239 new home sales in April drop to 168 in May for Sacramento County. Similarly, Placer County sales fell from 179 to 138 in the May report.
In April, Strech attributed the active housing market to anticipation of increased interest rates. He said that 3 percent interest rates may be a thing of the past and homebuyers moved quickly to beat increasing rates, the Appeal previously reported.