The rate of new-home sales hit a seven-year low in August and reached the lowest level for that month since August 1995, according to a U.S. Census Bureau and Department of Housing and Urban Development report released today.
The seasonally adjusted annual rate of new-home sales fell to 795,000 in August, down 21.2 percent compared to August 2006. That rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.
Also, the median new-home price fell 7.5 percent, to $225,700, and the average new-home sales price dropped 8 percent, to $292,000, in August compared to the same month last year.
The seasonally adjusted estimate of new houses for sale at the end of August was 529,000, which represents a supply of 8.2 months at the August sales rate.
The supply increased about 20.6 percent compared to August 2006. A supply greater than six months generally indicates a buyer’s market.
In March, the supply reached 8.3 months, which was the highest level since December 1990 when the supply reached 8.5 months.
Statistics are estimated from sample surveys, the agencies reported, and are subject to sampling variability and nonsampling error including bias and variance from response, nonreporting and undercoverage.
Changes in seasonally adjusted statistics often show irregular movement, and it can take five months to establish a trend for new houses sold. The survey is primarily based on a sample of houses selected from building permits, and the preliminary seasonally adjusted estimate of total sales is revised about 4 percent.
