New single-family home sales dropped in August from an unusually-high number of sales in July, but still recorded an increase from last year.
Sales of new single-family houses in August decreased 7.6% monthly to a seasonally adjusted annual rate of 609,000, according to a report from the U.S. Census Bureau and the Department of Housing and Urban Development. This is still, however, 20.6% above last year’s estimate of 505,000.
“After a solid July, new home sales came back to earth a little bit in August, though last month’s data still offer some decent news for the market,” said Zillow Chief Economist Svenja Gudell.
Although new home sales did drop in August, it doesn't come as much of a surprise considering that July saw its biggest gain since the housing bust.
“New home sales moved lower in August, but sales were at an expansion high in July and the longer-term trend remains positive due to strong homebuyer demand,” Nationwide Chief Economist David Berson said.
In fact, one expert pointed out that August’s new home sales are still up significantly from last year, bringing up overall growth for the year.
“New home sales in August grew strongly, and capped the best 12-month span since September 2008,” Trulia Chief Economist Ralph McLaughlin said. “Post-recession, homebuyers continue to turn to new homes as the inventory of existing homes on the market dwindles.”
The median sales price of new homes in August saw a significant decrease from July’s $294,600 to $284,000. On the other hand, the average sales price decreased, but only slightly from $355,800 to $353,600.
“Builders have been focused on the higher end of the market for much of the past few years, but there are concrete signs emerging that more attention is now being paid to the lower end — new homes priced in the $200,000-$299,000 range, just below the median price, saw the biggest jump in sales activity,” Gudell said.
“The median price of a new home is still higher than the median price of an existing home, but as more homes come on line, we expect to see prices continue to soften as the year winds down, however modestly, which will give buyers a small bit of breathing room,” she continued.
The seasonally adjusted estimate of new homes for sale at the end of August was 235,000, a supply of 4.6 months, up from July’s 4.3 months.
“While new home sales are helping homebuyers constrained by low resale inventory, the share of all home sales made up by new homes is still low,” McLaughlin said. “In August, new home sales represented about 11.5% of all sales, which is less than half of the pre-recession average of 23.6%.”