U.S. new-home sales surged an unexpected 28.8% in August compared to July, when sales fell 12.6%, while the median price of a new home sold during the month slid, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported.
Specifically, 685,000 new homes were sold in August, compared to 532,000 in July. The pace of newly built home sales in August was down 0.1% from the 686,000 homes sold a year before.
The median price of a new home sold in August was $436,800, down 6.3% from $466,300 in July and up 8% from $404,300 in August 2021.
The inventory of new homes for sale in August fell to 8.5 months from 10.6 months in July. It was higher than its August 2021 reading of 6.9 months.
The month-over-month jump in new-home sales could be “a bit of a mirage,” First American deputy chief economist Odeta Kushi said, noting that the Census Bureau does not adjust new-home sales figures to account for contract cancellations.
“Rising cancellations may have resulted in inflated sales numbers in August, while the decline in the average 30-year, fixed-mortgage rate between July and August may have prompted upward pressure on sales,” she said. “Leading indicators, such as permits and builder confidence, indicate ongoing weakness. With mortgage rates now above 6% and ongoing supply-side headwinds for builders, it’s likely the housing market will continue cooling as we head into the fall months.”
By region, the number of new-construction homes sold was up across the board, led by the Northeast, where sales rose 66.7% month over month, followed by the South, which posted a 29.4% gain, the West with a 27.5% increase and the Midwest with a 16.7% rise.