Sales of newly built homes increased 7.1% in August to 713,000 units, even though July’s figure was revised upward.
Stats from the HUD and US Census Bureau also show that sales were up 6.4% year-over-year. The figures include when a sales contract is signed or a deposit is accepted and can include homes at any stage of construction.
“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, the National Association of Home Builders’ 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 down payment.”
The inventory of new homes for sale was 326,000 in August, representing 5.5 months of supply. The median sales price was $328,400 up from $321,400 a year earlier.
New home sales are 11.7% higher in the South and 7.8% higher in the West but they were down 16.5% in the Northeast and 10.5% in the Midwest.
Outlook for new homes
First American Deputy Chief Economist Odeta Kushi said that conditions are positive for further increases.
“The outlook for new home sales is largely dependent on the amount of new construction being built, and the demand for new homes. Demand for new homes remains strong as household formation continues to grow, and purchasing power is buoyed by low mortgage rates and rising household income,” she said.
But she added that the lack of supply is an issue but things are also looking better in that regard.
“The 18% year-over-year growth in new home sales in August is a reflection of this dynamic. And the good news is that the growth in both housing starts and permits in August is a sign of more new home sales to come,” she said. “In a market with low mortgage rates and a healthy labor market, if you build it, they will buy it.”
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