Housing Market ‘Stuck in a Rut,’ Zonda Finds

(Illustration: Rich Howard/pexels.com)

The housing market is stuck in a rut, according to Zonda, Newport Beach, Calif. Resale activity remains sluggish and new home sales are down compared to this time last year.

“The housing market creates jobs during the construction of a new home, at the point of sale, and following move-in,” said Ali Wolf, chief economist for Zonda. “The longer this stagnant sales environment persists, the wider the potential economic impact, particularly due to an accompanying lower pace of housing starts.”

Zonda’s New Home Market Update found little change in sales activity. Just under 690,000 homes sold in June on a seasonally adjusted annualized rate, down 2.2% from a year ago.

The Zonda Market Ranking, which accounts for both sales pace and volume, is seasonally adjusted, and is taken as a percentage relative to a baseline market average, remained average for the sixth consecutive month relative stability in June. “While not a booming market, consumers are showing some positive response to builder incentives and/or price cuts,” the report said.

New home pricing was flat to down year-over-year, Zonda reported. Entry-level home pricing fell 1.7% to $326,964 on average, move-up homes dipped 1.0% to $518,725 and the high-end market remained flat with a $915,696 average.

Zonda’s monthly survey showed 39% of builders lowered prices in June compared to 38% in May, 59% held prices flat compared to 57% in May, and just 2% raised prices, down from 6% that increased prices in May.