Numbers: New home sales in the United States rose in August, as the market for newly-built buildings continues to show signs of stabilizing after months of decline.
New home sales in the United States rose 1.5% to an annual rate of 740,000, the government said on Friday. The figure is the number of homes that would be sold over a one-year period if the same number were purchased each month based on the sales rate in July. Compared to a year ago, sales are down 24%.
The median forecast of economists polled by MarketWatch was that new home sales would hit an annual rate of 720,000 for the month of August.
Unlike the National Association of Realtors’ Existing Home Sales report, the US Census Bureau’s New Home Sales report captures sales when the contract is signed rather than when the sale is closed.
The report’s small sample size also means that it is quite volatile and subject to significant revisions. Indeed, the turnover for July has been revised upwards to 729,000 compared to the initially announced number of 708,000.
What happened: The median selling price for new homes sold in August was $ 390,900, matching July’s record, which was a record. The supply of new homes for sale increased between July and August, equivalent to a supply of 6.1 months.
Regionally, the Northeast recorded the largest increase in new home sales, while the Midwest was the only part of the country to record a decline.
The big picture: The ability of new home sales to maintain this pace will depend on the willingness of buyers to withstand higher prices, especially given expectations that mortgage rates are likely to rise given the changing policies of the Federal Reserve.
âBuyers are showing signs of having moved beyond a ‘house at any cost’ mentality as rising home prices mean buying a home – whether new or existing – requires a bigger share of the typical American’s salary, “said Danielle. Hale, chief economist at Realtor.com.” Consumers recalibrated their priorities this summer, balancing the resumption of travel, vacations and dining out with important budget items like buying or renting a house, and this, in the face of rising costs on just about everything. â
What they say : âNew home sales have fallen sharply this year, but they haven’t fallen as much as the mortgage application data suggests. This is probably because the proportion of cash buyers, who do not appear in the mortgage data, has increased, as is clearly the case in the existing home market, âsaid Ian Shepherdson, chief economist. from Pantheon Macroeconomics, in a research note.
Market reaction: The Dow Jones Industrial Average DJIA,
and the S&P 500 SPX index,
both saw slight increases in Friday morning trades.
However, the main actions of home builders such as DR Horton DHI,
Lennar Corp. LEN,
and PulteGroup PHM,
were mixed after the release of the new home sales report.