Sales of newly built homes reached the highest level since early 2008 in August, evidence that demand for housing is strengthening heading into autumn.
Sales of new, single-family homes rose by 5.7 per cent to a seasonally adjusted annual rate of 552,000, the Commerce Department said Thursday.
US New Home Sales
New- home sales account for about 10 per cent of the US home purchase market, with existing homes making up the rest. Month-to-month data can be volatile; August’s increase had a margin of error of plus or minus 16.2 percentage points.
From a year earlier, new home sales were up 21.6 per cent in August.
Home builders raised new-home prices aggressively last year, likely weighing on sales, which totalled just 414,000 in 2014. That was little changed from sales in 2013. But builders have reined in price increases this year, fuelling more buyer traffic and purchases.
Thursday’s report showed August’s median sales price of new homes was $US292,700, a 0.3 per cent rise from a year earlier. Sales increased most strongly in the Northeast, up 24.1 per cent from July, but declined 9.1 per cent in the Midwest, the only region to see a drop-off.
Right now, however, potential buyers are facing fewer choices than would normally be the case. There were just 216,000 new homes for sale at the end of August, enough to last 4.7 months at the current pace of sales. That’s below the six months that is more common historically.
There is also a limited supply of existing homes, equivalent to just 5.2 months of sales. That has pushed up existing home prices 4.7 per cent in the past year to US$228,700.