New home sales post solid gains in August
Wednesday, September 25, 2019 from Floor Covering Weekly
“With job growth continuing and lower interest rates in place, builders report rising confidence levels, and this is reflected in today’s solid sales report,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.
“We have seen a general rebound in the housing market since spring, as sales, starts and permits have all registered gains,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for Forecasting and Analysis. “However, affordability remains a factor because buyers can’t benefit from lower interest rates if they don’t have the money for a downpayment.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the August reading of 713,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 326,000 in August, representing a 5.5 months’ supply. The median sales price was $328,400. The median price of a new home sale a year earlier was $321,400
Regionally, and on a year to date basis, new home sales are 11.7 percent higher in the South and 7.8 percent higher in the West. Sales are down 16.5 percent in the Northeast and 10.5 percent in the Midwest.