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New Home Sales Edge Higher in August

Existing-Home Sales Climb 2% in July
Sales of new single‐family houses in August 2021 were at a seasonally adjusted annual rate of 740,000—1.5% above the July rate.

Sales of new single‐family houses in August 2021 were at a seasonally adjusted annual rate of 740,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.  

This is 1.5% above the revised July rate of 729,000, but is 24.3% below the August 2020 estimate of 977,000.

The median sales price of new houses sold in August 2021 was $390,900. The average sales price was $443,200.  

Industry reaction

"New home sales stabilized in late summer following a cooling trend that took hold last winter," said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Florida. "Builder sentiment remains strong and housing demand is being supported by ongoing low mortgage interest rates and a shortage of existing home inventory."

"After the volatility of 2020, with significant declines for new home sales in the spring followed by an unsustainable rebound during the second half of the year, new home sales have cooled somewhat," said NAHB Chief Economist Robert Dietz. "Home prices are up 20% from a year ago due to higher construction costs, and these price hikes are a risk for housing affordability as we approach the end of the year." 

Other stats

Housing inventory is expected to come from several sources over the next year, including from existing homeowners and home builders—but very little is expected to come from homeowners foreclosed upon after the expiration of key federal protections, according to a Zillow survey of experts.

According to Zillow's survey:

  • Foreclosures are predicted to make up the smallest single source of available inventory at just 5.4%;
  • Homeowners listing their houses should make up 40% of inventory in the coming year;
  • Expiration of the eviction moratorium is not expected to have major impact on rent prices;
  • Appreciation should moderate but will stay historically high over the next five years.

"New home sales rose for the second consecutive month in August, the latest sign that homebuilders are recovering from problems that plagued them earlier in the year. The increase also reflects homebuilder sentiment that is on the rise as housing demand remains robust and the cost of lumber continues to ease," Zillow wrote

 

TAGS: residential
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