Sales of new single-family homes jumped 7.1% in August and were up 18.0% compared to August 2018. Declines in mortgage interest rates have helped spark a revival in homebuying. Consumers are electing to buy new construction due partly to limited supplies of the most sought-after units in size and price in existing stock, and because builders have responded to shortage to meet that demand.
Prices for new homes were up sharply in August, 7.5% higher than the prior month at $328,400, suggesting that consumers were buying at a higher price point while home affordability was boosted by low mortgage rates. Home prices were up 2.2% compared to a year ago. Sales were up for units in the upper end of the price ranges ($400,000 and above) and slightly softer for mid-price units ($150,000-399,999).
Consumers also were more inclined in August from the prior month to purchase units not yet started (+20.2% to 220,000) and units already build (+10.4% to 265,000), but not units currently under construction (-6.2% to 228,000).
Sales of new single-family homes were uneven across regions. There were declines in the Northeast (-5.9%) and Midwest (-3.0%) and solid gains in the South (+6.0%) and West (+16.5%).
The supply of new homes available for sale fell to 5.5 months’ worth, down from 5.9 months in the prior month and well below the 6.3 months in August 2018.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.