Job Growth, Low Interest Rates Behind Improved Home Sales
The combination of job growth and low interest rates made for a successful month of new home sales in August, increasing nearly 6.5% over the 2018 results. On Sept. 25, the National Association of Home Builders (NAHB) reported more than a 7% increase in new single-family homes last month, up from economists' predictions in July.
According to NAHB, a new home sale includes those with a signed or deposit-approved sales contract as well as homes prior, during or after construction. In the report, Danushka Nanayakkara-Skillington, NAHB's AVP for Forecasting and Analysis, said the housing market is experiencing a rebound with improvements in sales, starts and permits.
"However, affordability remains a factor because buyers can't benefit from lower interest rates if they don't have the money for a down payment," Nanayakkara-Skillington noted.
With an inventory of 326,000, the median home sales price rose by $7,000 since 2018, now at $328,400. Although sales increased in the South and the West, sales fell significantly in the Northeast and Midwest.
—Andrew Michaels, editorial associate