Sales of newly built, single-family homes increased 7.1 percent to a seasonally adjusted annual rate of 713,000 units in August off a revised upward reading in July, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. On a year-to-date basis, new home sales for 2019 are 6.4 percent higher than the same period in 2018.
“With job growth continuing and lower interest rates in place, builders report rising confidence levels, and this is reflected in today’s solid sales report,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.
“We have seen a general rebound in the housing market since spring, as sales, starts and permits have all registered gains,” said Danushka Nanayakkara-Skillington, NAHB’s AVP for Forecasting and Analysis. “However, affordability remains a factor because buyers can’t benefit from lower interest rates if they don’t have the money for a downpayment.”
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 713,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 326,000 in August, representing a 5.5 months’ supply. The median sales price was $328,400. The median price of a new home sale a year earlier was $321,400.
Regionally, and on a year to date basis, new home sales are 11.7 percent higher in the South and 7.8 percent higher in the West. Sales are down 16.5 percent in the Northeast and 10.5 percent in the Midwest.