After posting four consecutive monthly declines on rising mortgage rates and worsening affordability conditions, new home sales posted a solid gain in May as some buyers rushed into the market in advance of the Federal Reserve’s June interest rate hike.

Sales of newly built, single-family homes in May increased 10.7%, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Rising interest rates and ongoing building material supply chain disruptions that raise construction costs continue to act as significant headwinds on the housing market.

In more than 200 individual meetings with their representatives and senators, builders discussed several key housing issues.

Single-family growth rates have slowed over the past year due primarily to rising construction and building material costs. 

In April, more than 10,000 NAHB members from all 50 states, the District of Columbia and Puerto Rico sent a letter to President Biden calling on the White House to take action to address the growing housing affordability crisis.

New home sales posted a double-digit percentage decline in April, falling to their weakest pace in two years.

Builder confidence took a steep drop in May as growing affordability challenges in the form of rapidly rising interest rates.

Home builders warn of current deteriorating conditions as a sharp jump in mortgage rates in March and April coupled with ongoing building material supply chain disruptions, labor shortages and high inflation drive up housing costs.

The single-family housing market continued to show signs of softening in March as permits and starts declined due to rising mortgage interest rates and ongoing supply chain bottlenecks.