New home sales in August were at a seasonally-adjusted annual rate of about 800,000, an increase of 20.5% compared with July and up 15.4% compared with August 2024, according to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
As of the end of August there were about 490,000 new homes available for sale in the U.S. a decrease of 1.4% compared with July but up 4.0% compared with August 2024.
That’s about a 7.4-month supply at the current sales rate.
The months’ supply is down 17.8% compared with July and down 9.8% compared with August 2024.
The median sales price of a new home sold in August was $413,500, an increase of 4.7% compared with July and up 1.9% compared with August 2024.
The average sales price was $534,100 – up 11.7% compared with the previous month and up 12.3% compared with August 2024.
Although the increase for August was impressive some analysts and industry watchers say this was likely an anomaly, as homebuilders still face significant headwinds.
“Lower mortgage rates, along with builder incentives and discounts, helped unlock demand in August as new-home sales soared to an annualized pace of 800,000 — the fastest since early 2022 and well above consensus expectations of 650,000,” says Odeta Kushi, deputy chief economist for First American, in a statement. “Still, signs of a soft market remain. The latest NAHB survey showed 39 percent of builders cut prices in September — the highest share in the post-COVID period. Builder sentiment around future sales remains subdued, though it ticked up slightly in response to lower rates. Demand is there, but it’s taking incentives to coax hesitant buyers off the sidelines. Whether this momentum can be sustained remains to be seen.”
“That said, one month does not make a trend,” Kushi adds. “It’s important to consider the wide confidence intervals in the data and the fact that these figures don’t account for cancellations. Nevertheless, it’s a welcome sign of buyer life and positive progress in a still-challenging market.”
Photo: Alexander Andrews