Sales of newly built, single-family homes rose 3.5 percent in August to a seasonally adjusted annual rate of 629,000 units after downwardly revised June and July reports, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. These downward revisions suggest softness in new home sales activity this summer. However, on a year-to-date basis, sales are up 6.9 percent from this time in 2017.
“New home sales have ticked up in August, due to positive demographics and a strong overall economy,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La. “However, housing affordability remains a serious concern and builders must manage supply-side costs and stiff regulatory hurdles to keep prices competitive.”
“Housing affordability has taken a toll on new home sales over the summer, and there could be market volatility in the months ahead as communities grapple with the aftereffects of Hurricane Florence,” said NAHB Chief Economist Robert Dietz. “Still, we expect the overall housing market to grow this year as demand continues to increase among millennials and other newcomers.”
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 629,000 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 318,000 in August. The median sales price was $320,200.
Regionally, new home sales rose 47.8 percent in the Northeast, 9.1 percent in the West and 2.7 percent in the Midwest. Sales fell 1.7 percent in the South.