ARLINGTON, Va.—New home sales fell 8.7% in August to 675,000 annualized units, while sales in July were revised down 25,000 units. Compared to last year, August’s sales were 5.8% higher.
“With 30-year mortgage rates averaging over 7% in August, home sales unsurprisingly plunged by 8.7%,” said NAFCU Vice President of Research and Chief Economist Curt Long. “The Home Builders sentiment index dipped below 50 for the first time in five months. Furthermore, the survey showed that the measure of prospective buyers dropped to the lowest level since February, evidence that many prospective homebuyers have been sidelined by increasing mortgage rates.”
Based on current month sales, there were 7.8 months of supply in August, up 0.8 months from July. The number of unsold homes left on the market increased 11,000 to 443,000. This represents a 5.1% decline from inventory levels a year ago.
Sales Trends by Region
According to the new data, regionally, sales increased in the Northeast (6.7%). Sales fell in the Midwest (-17.2%), the West (-9.4%) and the South (-7.5%).
Long said that of note, the median new home price, non-seasonally adjusted, fell 1.4% to $430,400 – 2.3% lower than a year earlier.
“With more homes unsold at the end of the month in August, 32% of builders lowered prices in September, the largest share since December,” Long stated. “While permits and authorizations grew in August, housing starts fell by 11.3%, signs that builders are waiting to see better market conditions before breaking new ground. Nevertheless, the outlook for the new homes market remains positive as resale inventory remains exceptionally low, and macroeconomic conditions continue to prove resilient.”
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