ARLINGTON, Va.—New home sales rose at an accelerated rate of 28.8% in August to 685,000 annualized units, but the surge is due to a data anomaly, according to NAFCU’s chief economist.
Sales in July were revised up 21,000 units. Compared to last year, August sales were down 0.1%.
“Housing is clearly still in high demand, and thin inventory in the existing home market is pushing buyers towards new homes,” said NAFCU Chief Economist and Vice President of Research Curt Long. “The Census Bureau reports sales without making adjustments for cancelled sales contracts. At times in which the cancellation rate increases, the Census estimate will generally overestimate sales.”
Based on current month sales, there were 8.1 months of supply in August – a 2.3 month decrease from July. The number of unsold homes left on the market increased by 2,000 to 461,000, a 23.3% increase from inventory levels a year ago.
Up in Every Region, But…
New home sales rose in every Census region in August. Sales in the Northeast rose 66.7%, the most of any region, followed by the South (29.4%), the West (27.5%), and the Midwest (16.7%). The median home price fell by 6.3% in August to $436,800, an 8.0% increase from last year.
“Builders are on edge as mortgage rates continue to climb,” Long remarked. “The National Association of Home Builders/Wells Fargo Housing Market Index found builder sentiment declined for the ninth straight month in September. Nineteen percent of builders cut prices in August, and that number grew to nearly 25% in September.
‘Failure to Capture’
“In summary, the August surge is likely the result of a failure to capture contract cancellations and a temporary rush by builders to lock in new contracts. NAFCU expects moderately weaker sales going forward.” concluded Long.
The Very Best in CU Reporting. For You. For Free. Or Your Money Back
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.