Contracts for new, single-family home sales increased in August by 7.1% to a 713,000 seasonally adjusted annual rate according to estimates from the joint release of HUD and the Census Bureau. The increase came off a upwardly revised July estimate, which was increased from an initial reading of 635,000 to a new estimate of 666,000. Year-over-year, the August estimate is 18.0% higher. Sales continue to grow in August supported by lower mortgage rates.
Total sales for the first eight months of 2019 (474,000) were 6.4% higher than the comparable total for 2018 (445,000). We expect the volume of new home sales to continue to expand along the current modest pace, subject to monthly volatility and supply-side cost concerns.
Inventory increased 2.5% from a year ago to a level of 326,000 single-family homes for sale in August. The current months’ supply stands at a balanced level of 5.5. However, standing inventory increased in the “Completed” construction category (81,000 units), suggesting an increase in inventory taking longer to be sold.
Median new home sales price (price of a home in the middle of the distribution) increased 7.5% in August to $328,400 compared to July and 2.2% higher from a year ago ($321,400).
For the first eight months of 2019 (and relative to the first eight months of 2018), new home sales were up 11.7% in the South, 7.8% in the West, and down 10.5% in the Midwest and 16.5% in the Northeast, due to some tax reform related effects and affordability.
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