Sky-high mortgage rates leave homes unaffordable for more buyers, sending new home sales tumbling

Sales of new U.S. homes hit a 5-month low last month as sky-high mortgage rates continue to strain prospective homebuyers’ ability to afford a dwelling. The pace slowed 8.7% in August from the previous month to a seasonally adjusted annual rate of 675,000 properties, the Department of Commerce reported this week. Homebuilders have been able to mitigate the impact of the elevated mortgage rates on their sales by lowering prices and offering incentives like paying buyers’ closing costs or buying down the rate on their mortgage.