Mortgage Matters ... by Stephen Trye, "The Mortgage Guy"
We dabbled a little in economic theory last week, noting that more inventory produces lower prices and more sales. This week, the opposite occurred: less inventory produced higher prices, but also lead to more sales.
We are speaking of sales of new homes, which jumped 7.3 percent to a higher-than-expected annualized rate of 323,000 units. Strong sales drew down supply to 6.5 months from 7.2 in March. Here's the economics at work: Lower supply is firming prices, with the median price of new homes up 1.6 percent to $217,900. Year-over-year, the median price is up 4.6 percent.
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