New home sales sank in August as homebuyers faced soaring prices and rates, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales declined by 8.7% to a seasonally adjusted annual rate of 675,000. They were up 5.8% from the same time last year, however.
The seasonally adjusted estimate of new houses for sale was 436,000, representing a supply of 7.8 months at the current sales rate.
The median price for a new home was $430,300, down from the month prior, while the average sales price was $514,000, up slightly.
Newly built homes cost about as much as existing homes now thanks to inventory shortages, and they’re accounting for more of the market. New construction accounted for nearly one-third of all inventory in Q2. Historically, it accounts for only 10%.
“The tale of two housing markets persists,” Ali Wolf, Zonda’s chief economist, said of new construction data. “[M]any builders have some inventory to sell and are willing to sweeten the deal for consumers with incentives. In contrast, resale sales are down year-over-year as the lack of inventory continues to plague the market.”
The total value of the U.S. housing market just broke a new record at $52 trillion due to price surges through the beginning of the year. This is great news for homeowners sitting on unprecedented levels of equity but problematic for first-time and low-income house hunters trying to move up from renting.
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