New Home Sales in U.S. Dip in August

New Home Sales in U.S. Dip in August

Residential News » Orlando Edition | By Monsef Rachid | September 26, 2016 11:34 AM ET

According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes in the U.S. fell 7.6 percent in August 2016 from an upwardly revised July reading to a seasonally adjusted annual rate of 609,000 units.
This marks the second consecutive month that sales have topped a 600,000 annual pace since the Great Recession.

"Given the huge jump in sales in July, the August reading remains robust," said Ed Brady, chairman of the National Association of Home Builders (NAHB).  "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."

"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," said NAHB Chief Economist Robert Dietz.

The inventory of new homes for sale was 235,000 in August, which is a 4.6-month supply at the current sales pace. The median sales price of new houses sold was $284,000.

Regionally, new home sales fell by 34.3 percent in the Northeast, 12.3 percent in the South and 2.4 percent in the Midwest. Sales rose 8 percent in the West.

According to Chief Economist Jonathan Smoke, "Based on recent data, you might think that the housing market took a turn for the worse in August - but it didn't."
Smoke continued, "In fact, we are seeing good signs that the new home market is finally growing substantially, with sales of new homes up bigtime over this time last year and so far this year. It looks like these gains are happening because builders are shifting product towards more affordable price points and responding to strong demand by building with contracts in hand. This August only 30 percent of new homes sold were already completed."
"Even with a continued lack of homes on the market, total home sales are up 4 percent over last year.  That shows a clear shift in the composition of sales - new homes have more room to grow while existing homes are limited by their owners' willingness to sell', concluded Smoke.

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