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New Home Sales Reverse Course, Ending Two-Month Deficit

New Home Sales posted a month-over-month increase for the first time since May according to Wednesday's report from the U.S. Census Bureau and the Department of Housing and Urban Development. Sales in August rose 3.5 percent to a seasonally adjusted annual rate of 629,000 from a revised rate of 608,000 in July. July's revision takes a little of the bloom off of the August report as July sales were originally reported at a rate of 627,000 units, already a 1.7 percent monthly loss. The August estimate however is a substantial 12.7 percent upgrade from last August's rate of 558,000 units.

Econoday noted, prior to the report release, that new home sales had failed to meet the consensus estimate of its panel of analysts for two months, and by a substantial degree. It missed again this month but was only 1,000 units under the consensus of 630,000. The range of estimates was 608,000 to 650,000.

On a non-adjusted basis there were 50,000 newly constructed homes sold during the month, down from 52,000 in July. Sales during the first eight months of 2018 total 448,000 units compared to 419,000 for the same period in 2017.

The median price of a home sold in August was $320,200, up from $314,200 a year earlier. The average price rose from $369,200 to $388,400.

At the end of the reporting period there were an estimated 318,000 new homes for sale, a 6.1 month supply. Homes are averaging 2.8 months on the market after completion, however two third of homes sold were not yet ready for occupancy, about a third sold before construction was begun.

Sales in the Northeast were up 47.8 percent from July's level but were 2.9 percent lower than a year earlier. The Midwest had increases of 2.7 percent and 13.2 percent over the two prior periods. Sales in the South declined 1.7 percent month-over-month but were 11.5 percent higher than a year earlier, and sales in the West rose 9.1 percent over July's and were up 19.1 percent on an annual basis.

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