New Single-Family Home Sales Rise in August
According to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built single-family homes increased 6.4% in August to a seasonally adjusted annual rate of 684,000, following an upwardly revised July estimate. The pace of new home sales was 2% lower than a year earlier.
“The gain in new home sales is encouraging, but affordability remains a challenge,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio. “Sales are still down year over year and year to date, and builders continue to use incentives and pricing adjustments to support buyers as limited existing-home inventory helps sustain the new-home market.”
“While the monthly increase in sales is a positive development, housing demand remains sensitive to higher mortgage rates and broader macroeconomic conditions,” said Danushka Nanayakkara-Skillington, NAHB assistant vice president for forecasting and analysis. “A sustained improvement in affordability, particularly through lower financing costs, would provide a stronger foundation for housing demand going forward.”
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the August reading of 684,000 units is the number of homes that would sell if this pace continued for the next 12 months.
According to the data, new single-family home inventory in August was unchanged from July at 483,000 units but fell 2.0% from a year ago. This represents an elevated 8.5 months’ supply at the current building pace. Completed, ready-to-occupy inventory consisted of 112,000 homes in August. When looking at the combined inventory of both resale home and new homes, the month’s supply was 5.3 months at the current pace of building.
Regionally, on a year-to-date basis, new home sales are down 0.6% in Midwest, 1.0% in the South and 10.0% in the West. New home sales were unchanged in the Northeast.
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