August New Home Sales Retrench but Still Solid

After a spectacular run for new home sales in July, it was anticipated that August activity would be considerably more modest.  While sales did retrench from the post-crash highs reached the previous month (which improved even further when revised), the August numbers still came in above analysts’ estimates

The Census Bureau and the Department of Housing and Urban Development estimates that August sales of newly constructed single-family homes were at a seasonally adjusted annual rate of 609,000, a 7.6 percent drop from July when the rate was 659,000 units, a number originally reported at 654,000.  The August sales rate was 20.6 percent higher than that of a year earlier, 505,000.

Analysts polled by Econoday had expected sales to be within a range of 575,000 to 630,000.  The consensus was 598,000.

On an unadjusted basis, sales during the month totaled 50,000 units compared to 57,000 in July.  In August 2015 there were 41,000 units sold. Units going under contract in August were on the market for a median of 3.2 months.

The median sales price of a home sold during the month was $284,000 compared to $300,200 a year earlier.  The most recent average price was $353,600, up from $348,800 in August 2015.

There were an estimated 239,000 units (unadjusted) available for sale as the end of the reporting period, a 4.8-month supply at the current absorption rate.  In August 2015 the inventory was deemed sufficient for 5.2 months.  Of those units currently available, construction is complete on 56,000, 138,000 are in process, and work has not begun on 45,000 units.

Sales in the Northeast region dropped by 34.3 percent from July and were 25.8 percent lower than a year earlier.  In the Midwest sales, while down 2.4 percent month-over-month, were 39.7 percent higher than the previous August.  Sales were also lower for the month in the South, by 12.3 percent, but remained 15.9 percent above sales in the same month in 2015.  New home sales in the West maintained their momentum, rising 8.0 percent in August and gaining 35.0 percent year-over-year.


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