09-28-21 | News

New Home Sales Creep Higher in August

Fewer Existing Homes Fuel Construction

New housing sales spiked in August, yet inventory is more balanced with a 6.1-month supply level.

In conjunction with high demand due to low-interest rates and low inventory, the August housing market saw an uptick in new home sales as home prices continue to spike.

Sales of newly built, single-family homes in August rose 1.5 percent to a 740,000 seasonally adjusted annual rate from a revised reading in July according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.


"New home sales stabilized in late summer following a cooling trend that took hold last winter," said the National Association of Home Builders (NAHB), Chairman Chuck Fowke, "Builder sentiment remains strong and housing demand is being supported by ongoing low mortgage interest rates and a shortage of existing home inventory."

Meanwhile, sales are up 2.4 percent on a year-to-date basis. Median sales prices remained flat at $390,900 from July to August but were up 20 percent from the $325,500 median sales prices from a year prior.

"After the volatility of 2020, with significant declines for new home sales in the spring followed by an unsustainable rebound during the second half of the year, new home sales have cooled somewhat," NAHB Chief Economist Robert Dietz explained, "Home prices are up 20% from a year ago due to higher construction costs, and these price hikes are a risk for housing affordability as we approach the end of the year."

New home year-to-date sales fell 1.0 percent in the Northeast and 2.3 percent in the West but rose 4.4 percent in the Midwest and 4.5 percent in the South.


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