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New single-family home sales continued its winning streak in August, rising 9.8 percent year over year to a seasonally adjusted annual rate of 716,000, according to a joint report from the U.S. Census Bureau and the Department of Housing and Urban Development on Wednesday.
The median ($420,600) and average ($492,700) sales price for new homes declined 2.25 percent and 4.14 percent year over year, respectively, as the seasonally-adjusted estimate of new houses for sale at the end of August reached 467,000 or 7.8 months of supply.
Odeta Kushi
First American Deputy Chief Economist Odeta Kushi called the report a “bright spot,” despite a 4.7 percent monthly decline. Kushi characterized the decline as a blip, noting that easing mortgage rates and robust homebuilder incentives will pull homebuyers off the sidelines into the fall.
“While existing-home sales have struggled to gain any momentum, the new-home market has remained a relative bright spot in the housing market due to builders’ ability to offer incentives and bring buyers off the sidelines,” she said in an emailed statement to Inman. “There is better news on the horizon, however.”
“According to [the National Association of Home Builders], builder sentiment increased in September as mortgage rates declined by more than one-half of a percentage point from early August through late September,” she added. “Additionally, builders now have a positive view for future new-home sales for the first time since May 2024.”
Dr. Lisa Sturtevant
As homebuilder sentiment ticks up, Bright MLS Chief Economist Lisa Sturtevant said there are “a couple of countervailing factors” that might pose a challenge for the new-home market in the fall and winter.
“First, buyers who are back in the market will find they have more options. The inventory of existing homes has been increasing as more owners are listing their homes for sale, and lower rates will encourage more homeowners to list,” she told Inman. “As a result of more existing homes on the market, there could be less demand for new homes.”
“Second, historically, lower mortgage rates tend to lead to an increase in price growth, but this year affordability is still a major constraint on the market,” she added. So, while there may be more buyers in the market, home builders might find that consumers’ purchasing power has not increased.”
