ARLINGTON, Va.—While new home sales continued to rise for the fourth straight month in August, up 4.8% from July's revised rate of 965,000 annualized units to 1,011,000 units, NAFCU's Curt Long said "inventory is a concern."
"Normally, single-family permits for a given month exceed sales by 30% or more, but over the last two months permits and sales are neck and neck," said Long, NAFCU's chief economist and vice president of research. "This is despite the fact that single-family permits are up 16% from a year ago. The new home market is absorbing some of the imbalances in the existing market, where lower-priced options are scarce.
"New homes priced above $500,000 made up just 8% of total sales in August, compared to 16% a year ago,” continued Long. “The normal caveats around economic uncertainty still apply, but the Fed will keep rates accommodative for the foreseeable future, and housing should remain a strong tailwind for the recovery.”
Compared to a year ago, new home sales were up 43.2% in August.
Regional Performance
Sales grew in two of the four regions during the month, rising 13.4% in the South and 5% in the North. Sales fell in the Midwest (-21.4%) and West (-1.7%).
Based on current month sales, there were 3.3 months of supply in August, down from 3.6 months in July. The number of unsold homes left on the market also declined to 282,000 units and represented an 13.2% reduction from year-ago inventory levels, Long said.
Of note, the median new-home price decreased from $327,800 (non-seasonally adjusted) in July to $312,800 in August. The month’s prices were down 4.3% from a year ago, Long added.
"Normally, single-family permits for a given month exceed sales by 30% or more, but over the last two months permits and sales are neck and neck," said Long, NAFCU's chief economist and vice president of research. "This is despite the fact that single-family permits are up 16% from a year ago. The new home market is absorbing some of the imbalances in the existing market, where lower-priced options are scarce.
"New homes priced above $500,000 made up just 8% of total sales in August, compared to 16% a year ago,” continued Long. “The normal caveats around economic uncertainty still apply, but the Fed will keep rates accommodative for the foreseeable future, and housing should remain a strong tailwind for the recovery.”
Compared to a year ago, new home sales were up 43.2% in August.
Regional Performance
Sales grew in two of the four regions during the month, rising 13.4% in the South and 5% in the North. Sales fell in the Midwest (-21.4%) and West (-1.7%).
Based on current month sales, there were 3.3 months of supply in August, down from 3.6 months in July. The number of unsold homes left on the market also declined to 282,000 units and represented an 13.2% reduction from year-ago inventory levels, Long said.
Of note, the median new-home price decreased from $327,800 (non-seasonally adjusted) in July to $312,800 in August. The month’s prices were down 4.3% from a year ago, Long added.
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