New home sales rose in August to a seasonally adjusted annual rate of 685,000, up 28.8% from July’s revised rate but down 0.1% YOY, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.
The seasonally‐adjusted estimate of new houses for sale at the end of August was 461,000, representing a supply of 8.1 months at the current sales rate.
The median sales price of a new home was $436,800, while the average sales price was $521,800.
The data comes on the heels of a surprise increase in mortgage applications last week, despite rates rising to their highest point since October 2008.
“As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”
Still, home sales are expected to keep dropping as economic uncertainty and rising interest rates push potential buyers out of the market. Between rates and prices, the monthly mortgage payment on a typical US home is 62% higher than a year ago.
Some of this volatility can be attributed to lingering stock shortages. Active inventory recently rose to a new peak for the year but remains historically low.
“The very low level of inventory means that a headlong collapse in prices is unlikely, but we still expect a total decline of up to 20% by the middle of next year,” Ian Shepherdson, chief economist at research consultancy Pantheon Macroeconomics, said in a research note.
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