New Home Sales Hit 14-Year High
New single-family homes in the U.S. are flying off the market, soaring to a 14-year high, according to the Census Bureau and the Department of Housing and Urban Development. Sales reached a seasonally adjusted annual rate of 1.011 million in August, which is 4.8% higher than July and 43.2% above August 2019.
Economists predicted sales would decline by 1%, states Reuters. However, this is the first time since November 2006 that sales reached the 1-million-unit mark and the fourth straight month of improvement.
With the surge in buying, the supply has lessened, dropping to 3.3 months at the current sales rate. "Homebuilders are clearly selling homes faster than they can build them," states a Wells Fargo Securities report. "All of the decline in inventories occurred among homes already completed or currently under construction. Inventory of not-yet-started homes rose slightly, suggesting that builders are scrambling to secure more lots and open new communities."
The median sales price dropped by $15,000 in August to $312,800, while the average sales price dipped below $370,000 for the first time since May.
Regionally, sales in the Northeast and South climbed from month to month. The West declined slightly, but the Midwest sank more than 20%. Sales on a year-over-year basis increased exponentially in all four regions with the South and Midwest at 50% growth or higher.
-Michael Miller, managing editor