New single-family home sales fell last August as high price mortgage loan topped 7%, according to a report by the National Association of Home Builders.

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The sale of new homes declined back in August as high price mortgage loan have continued to hinder demands.

According to Kiplinger, sales of newly built, single family homes in August declined by 8.7% to a 675,000 seasonally adjusted annual rate from an upward revised July reading. A Dearth of existing home for sale has pushed buyers to seek out new builds.

New single-family home inventory was 436,000 in August, down to 5.3% from last year. Of the total home inventor in August, which includes both new and resale homes. Newly built home represented an elevated 31% of those available for sale, and almost 16% of total home sales.

Robert Dietz, NAHB chief economist, said that sales have weekend in August with average mortgage rates above 7%, while some builders were able to offset that effect via mortgage rate buydowns, rates moved higher just this month, suggesting the pace of home sales will weaken further for this September.

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The median sale price of a new home fell about 2% to $430,300 in August compared to a year ago, which is primarily attributed to builder incentives and a shift toward building slightly smaller homes.

Dietz said that builders are being more cautious about managing their inventory in the rising rate environment. Builders continue to grapple with supply side concerns in the market with poor level of housing affordability as high price mortgage loan have risen. High price mortgage loan price out demand, but also increase the cost of financing or builder and developer loans, adding another hurdle for builds.

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