New home sales increased in August even as existing home sales declined. This could be a sign that buyers are turning to newly built homes as shortages limit their options.
Sales of new single-family homes in August hit a seasonally adjusted annual rate of 740,000, a drop of 24% from last year but an increase from the revised rate of 729,000 in July, the Census Bureau said on Friday. and the Department of Housing and Urban Development. The consensus called for a rate of 710,000.
Home prices remained at an all time high in August as builders continued to face material and labor shortages. The median selling price was $ 390,900, on par with the July rate, which was revised up. Over the past month, several public builders have said supply chain disruptions have reduced deliveries or sales of new homes.
“Higher construction costs, longer delivery times and the general unpredictability of the residential construction supply chain have measurable impacts on new home prices,” the chief economist of New Homes wrote on Friday. the National Association of Home Builders, Robert Dietz, after the data was released.
Rising home prices are likely to exclude buyers from the lower end of the market, Dietz wrote. “While demographic demand remains strong, the lack of entry-level offering remains a challenge for the market. The supply of new homes stood at 6.1 months in August, according to census data released earlier this week. The supply of existing housing, for its part, was 2.6 months, at the same rate as in July but lower than the 3 months of inventory in August 2020.
The news comes at the end of a mixed week for the real estate market. Existing home sales in August fell to a rate of 5.88 million from a revised 6 million the previous month, the National Association of Realtors reported. New home construction indicators rose in August, but the gain came from multi-family construction, not single-family homes.
Friday’s census report echoed a statement from the Mortgage Bankers Association earlier this week. Mortgage applications for the purchase of a new home were up 9% on a seasonally adjusted basis in August compared with July. This is an indication of strong demand during a season when new home purchases generally decline, said Joel Kan, associate vice president of economic and industrial forecasting for the trade group, in a statement released earlier this week. week.
“As the new home construction market is a much smaller segment of the overall housing market, potential buyers are increasingly turning to new homes due to the very low number of existing homes for sale,” he said. Kan said.
Write to Shaina Mishkin at [email protected]