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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

Strategic Global Intelligence Brief for September ...
Strategic Global Intelligence Brief for September ...

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Tuesday, 11 August 2020