Sales of new single-family homes rose 1.5% last month to a seasonally adjusted annual rate of 740,000, according to the U.S. Census Bureau and Department of Housing and Urban Development. The rate was 24.3% below the August 2020 reading of 977,000. Analysts were anticipating 714,000 new homes sold, higher than July’s upwardly revised rate of 729,000.
New home sales, which account for about 10% of the housing market, had until July fallen for every month in 2021 as buyers contended with low inventories and record-high prices. “New home sales appear to be reaching an equilibrium after the recession dip and the following mania that peaked about a year ago and drove down inventories,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Inventories have risen back to a normal range, but the new equilibrium is for much more expensive homes, which is increasingly shutting out first-time homebuyers from the new home market.”
In August the median price for new homes sold last month rose to a record $390,900, up from $390,500 in July. Prices were 20% above the year-ago level of $325,500.
The increase in new home sales comes two days after the National Association of Realtors said sales of existing homes declined 2% in August to a seasonally adjusted annual rate of 5.88 million. August marked the fourth month in five when sales declined.
For information on the housing market in East Bay San Francisco, please check Joanne Fishman’s podcasts on YouTube/Joanne Fishman East Bay Realtor.