New-Home Sales Hit Snag After 9-Year High
September 27, 2016
New single-family home sales posted the largest drop in nearly a year in August, but builders say they’re not alarmed.
Sales of newly built, single-family homes plunged 7.6 percent in August to an annual rate of 609,000 units, according to data released by the Commerce Department this week. Despite the drop, it is the second consecutive month that new-home sales have topped a 600,000 annual pace since the Great Recession, the National Association of Home Builders reports. In July, new-home sales had surged to a nine-year high.
"Given the huge jump in sales in July, the August reading remains robust," says Ed Brady, NAHB’s chairman. "Sales are up 21 percent from August last year and year-to-date they are running 13 percent higher, indicating that the housing recovery remains firmly on track."
The inventory of new homes for sale in August was 235,000, a 4.6-month supply at the current sales pace. The median sales price was $284,000, the Commerce Department reports.
"A low supply of homes, a broadening of the market with additional sales growth in lower price points and rising household formation all point to a growing demand for housing as we move into 2017," says NAHB Chief Economist Robert Dietz.
Read more: New-Home Prices Are Going Up: Here's Why
Across the country, new-home sales dropped by the highest percentage in the Northeast, falling 34.3 percent in August month-over-month. The South saw a 12.3 percent drop, and the Midwest had a 2.4 percent decrease. The only region to see an increase in sales last month was in the West, where new-home sales rose 8 percent.
Updated: May 28, 2020