ARLINGTON, Va.—New home sales continued to rise for the third straight month in July, up 13.9% from June's revised rate of 791,000 annualized units to 901,000 units – the highest level since 2006. In addition, compared to a year ago, sales were up 36.3%.
"These strong numbers are supported by pent-up demand and low interest rates, but supply is still a concern," said Curt Long, NAFCU's chief economist and vice president of research. "Builders are complaining of a lack of skilled labor and increased construction costs. However, builder confidence is at a record high and housing starts have improved in the past several months.
"The housing market is soaring and while risks abound, it would take something severe to derail the momentum. NAFCU expects housing to remain a big positive for the economy through at least the end of the year," he concluded.
Sales grew in three of the four regions during the month, rising 58.8% in the Midwest, followed by the South (+13%) and West (+7.8%). Sales in the Northeast fell 23.1%.
Inventory Levels
Based on current month sales, there were four months of supply in July, down from 4.6 months in June. The number of unsold homes left on the market also declined to 299,000 units and represented an 8.8% reduction from year-ago inventory levels.
Of note, the median new-home price decreased from $343,300 (non-seasonally adjusted) in June to $334,000 in July. This month’s prices are up 8.3% from a year ago, Long said.