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New Home Inventory Crosses 6-Month Supply Mark as Sales Lag

New home sales were down again in August, following a 9.4 percent plunge in July. The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes sold during the month at a seasonally adjusted rate of 560,000 units. This is a 3.4 percent drop from the revised rate of 580,000 (from 571,000) in July and is 1.2 percent lower than the August 2016 rate of 567,000.

On a non-seasonally adjusted basis there were an estimated 45,000 new homes sold nation-wide in August, compared to 50,000 sales in July.

At the end of the reporting period there were an estimated 284,000 new homes available for sale, a 6.1-month supply. Among this number were an estimated 65,000 homes that were ready for occupancy and 55,000 for which construction had not commenced. The available inventory increased by 10,000 units from June and the estimated supply grew by 0.4 month. The median time homes have been for sale rose from 2.9 to 3.1 months.

The median price of a home sold in August was $300,200, and the average was $368,100. In August 2016 the median sale price was $298,900 and the average was $355,100.

The rate of sales in the Northeast was down 2.6 percent month-over-month, but up 65.2 percent on an annual basis. There was no change in the rate of sales in the Midwest compared to July, but a 4.5 percent increase from August 2016.

In the South, there was a decline of 4.7 percent in the monthly numbers, and 9.2 percent year-over-year. Sales fell 2.7 percent in the West compared to July but were 4.3 percent above the rate a year earlier.

In an addendum to the August report the Bureau said information regarding residential sales are not available at the state or local level. However, based on its Building Permits Survey, the Bureau estimates that about 14 percent of the housing units authorized by permit nationwide in 2016 and 27 percent of those authorized in the South region were in areas declared as Individual Assistance disaster areas by FEMA following Hurricane's Harvey and Irma. New residential sales are obtained from the Survey of Construction and several of the counties impacted by the Hurricanes are in that survey sample. The Census Bureau said it did not alter procedures for developing seasonally adjusted estimates for sales because of the weather disasters.

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