ARLINGTON, Va.—New-home sales increased 3.5% in August, but those gains are being offset by downward revisions to the prior three months of sales data. NAFCU Research Assistant Yun Cohen said that despite strong demand for homes, sales have been trending lower – largely due to "persistent affordability issues."
"An uptick in unsold inventory is starting to put downward pressure on price appreciation in recent months, but affordability is unlikely to improve meaningfully until builders ramp up single-family construction," Cohen added. "While builder confidence remains firm in September, there are concerns about rising material costs and labor shortages. Hurricane Florence is also expected to have some negative impacts on construction activities for the next few months."
August's new-home sales were 12.7% higher than a year ago.
Growth in Three of Four Regions
Sales during the month improved in three of the four regions: Sales in the Northeast increased 47.8%, followed by the West (+9.1%) and the Midwest (+2.7%). Sales in the South declined 1.7% during the month, Cohen said.
Based on current-month sales, there were 6.1 months of supply in August, down from 6.2 months in July. The number of unsold homes left on the market rose from 313,000 to 318,000 units. This marks the highest inventory level since 2009 and represents a 13.2% increase from a year ago, Cohen said.
The median new-home price, non-seasonally adjusted, decreased from $328,100 in July to $320,200 in August. August's prices were 1.9% higher than a year ago, Cohen said.