09/28/2021

New Residential Sales Rise 1.5% from July to August

Sales came in at a seasonally adjusted annual rate of 740,000, down 24.3% from 977,000 in August 2020.

Sales of new single-family homes were at a seasonally adjusted annual rate of 740,000 in August, according to the U.S. Census Bureau and the Department of Housing and Urban Development’s latest monthly report. This is 1.5% higher than the revised July rate of 729,000, but 24.3% below the August 2020 estimated rate of 977,000.

"Despite continued supply chain disruptions, new-home sales beat expectations with August’s figure, highlighting how powerful today’s level of demand is," says Ali Wolf, chief economist at Zonda. "More lots are expected to be on the way, but given the immense supply/demand imbalance the market will likely remain undersupplied through the end of the year."

The median sales price of new homes sold in August was $390,000, while the average sales price was $443,200. The seasonally adjusted estimate of new houses for sale was 378,000 at the end of August, or a supply of 6.1 months at the current sales rate.

"The non-seasonally adjusted number of homes for sale at the end of the month hit the highest level since October 2008," says Mark Palim, deputy chief economist at Fannie Mae. "However, the increase in homes for sale was partially driven by a record number of homes for which construction had not yet started, accounting for approximately 28% of all homes for sale at the end of August. Combined with the large increase in the share of homes sold but not yet started, this report continues to highlight the ongoing difficulties that home builders are facing as they attempt to work through their current construction backlog, due to a shortage of labor (particularly in the skilled trades) and elevated material costs and outright shortages. We currently expect new-home sales to move upward into 2022, as demand for new homes remains robust, though the primary constraint remains the pace at which home builders can overcome their backlog and take on new orders.”

Source: Builder Online