Once again new home sales exceeded
expectations, this time by a lot. Sales of newly built homes rose 4.8 percent
in August, to a seasonally adjusted annual rate of 1.011 million. That puts sales
an astounding 43.2 percent higher than they were the previous August. It was
the sixth straight month of rising sales.
After such a string of increases, analysts
had expected sales to pull back a bit. Those polled by Econoday were
looking for the number to come in between 820,000 and 950,000 with a consensus
of 875,000. Perhaps they would have come up with a better forecast had they
known that the July number from the Census Bureau and Department of Housing and
Urban Development, would be upgraded substantially. The original estimate of 901,000,
was revised to 965,000.
On a non-adjusted basis, sales were
unchanged from July at 83,000 units. For the year-to-date there have been
543,000 new homes sold, a 14.9 percent increase from the 472,000 sales over the
first eight months of 2019.
At the end of the reporting period there
were 282,000 new homes available for sale, down from 291,000 in July. This is
estimated as a 3.3-month supply at the current absorption rates compared to 3.6
months in July and 5.5 months in August of 2019. New homes have been on the
market for a median of 4.2 months.
Prices have declined on an annual basis. The
median price of a home sold in August was $312,800 and the average was
$369,000. Prices a year earlier were $317,000 and $392,700, respectively.
The increase in sales did not impact every
region. Two of the four posted declines during the month, but all were higher
than in August 2019 by double digits.
Sales in the Northeast were up 5.0 percent
from July and 27.3 percent higher than the previous August. The Midwest saw a
month-over-month decline of 21.4 percent but kept a 54.7 percent edge over
sales a year earlier.
The South’s sales rose 13.4 percent and
50.0 percent from the two earlier periods. The West had a 1.7 percent monthly
decline but an annual increase of 26.5 percent.