New home sales in August climbed to a seasonally adjusted annual rate of 685,000, an increase of 28.8% compared with July but down 0.1% compared with August 2021, according to estimates from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The median sales price of new home sold in August was $436,800. The average sales price was $521,800.
As of the end of the month, there were about 461,000 new homes available for sale in the U.S. That’s about an 8.1-month supply at the current sales rate.
Regionally, and year over year, new home sales fell 15.6% in the Northeast, 24.5% in the Midwest, 10.8% in the South and 16.7% in the West.
“With housing affordability at a more than 10-year low and the Federal Reserve continuing to aggressively raise interest rates to rein in stubbornly high inflation, policymakers must find ways to reduce construction costs that are delaying home projects and putting upward pressure on home prices,” says Jerry Konter, chairman of the National Association of Home Builders (NAHB), in a statement.
“The sales gain in August reflects that there is clearly sidelined demand for housing, but it is being constrained by rising interest rates that are pricing many potential consumers out of the market, particularly entry-level buyers,” adds Robert Dietz chief economist for NAHB. “After a brief lull when mortgage rates fell below 5.3 percent for much of August, they have since jumped much higher in September and are now approaching 7 percent. The Fed should take careful note of the weakening of the housing market given the policy lag involved with monetary policy. Housing is a leading indicator of economic conditions.”
