New Home Sales Cross Half-Million Mark; 1st Time in 6 Years

There was a significant jump in new home sales in August as the seasonally adjusted rate broke through the half million mark for the first time since May 2008.  The Census Bureau and the Department of Housing and Urban Development said this morning that sales of newly constructed single-family homes were at a seasonally adjusted rate of 504,000 units, an 18 percent increase from sales in July. Economists surveyed by Reuters expected only 430k units.

The August rate of sales is 33.0 percent higher than the estimate of 379,000 homes reported for August 2013. The July rate of sales was revised from 412,000 units to 427,000 units which would have made the July rate an 8,000 unit increase over June rather than a decrease as previously noted. 

On a non-seasonally adjusted basis there were 41,000 new homes sold during the month compared to 38,000 in July and 31,000 one year earlier.

The median price of a new home sold in August was $275,000 and the average price was $347,900.  In August 2013 the average and median sales prices were $255,300 and $310,800 respectively.

At the end of the reporting period there were an estimated 203,000 new homes for sale, a 4.8 month supply at the current level of sales compared to a 5.6 month supply in July.  This is the first time since last October that the inventory has dipped below a 5 month supply.  Homes that sold in August were on the market a median of 3.3 months.

New homes sales increased month over month in every region but the Midwest where they were unchanged from both July and from one year earlier.  Sales were up in the Northeast by 29.2 percent while remaining 3.1 percent below sales a year earlier.  In the South there was a gain of 7.8 percent month-over-month and 27.2 percent year-over-year.  There was a huge jump in sales in the West where seasonally adjusted monthly sales were up by 50 percent and the annual rate increased 84.3 percent.