New home sales slide in July
Sales of new single-family houses fell to a 9-month low, the Commerce Department reported today.
New home sales in July were at a seasonally adjusted annual rate of 627,000, below the revised June rate of 638,000. However, this is 12.8% above the July 2017 estimate of 556,000.
The median sales price of new houses sold in July 2018 was $328,700. The average sales price was $394,300. The seasonally-adjusted estimate of new houses for sale at the end of July was 309,000, representing a 5.9-month supply at the current sales rate.
Regionally, new home sales declined 3.3% in the South but grew 10.9% in the West and 9.9% in the Midwest. The Northeast took the biggest hit as sales plummeted 52.3%.
Commenting on today's report, National Association of Home Builders Chairman Randy Noel said, “A lack of overall housing inventory is pushing up home prices, which is hurting affordability and causing prospective buyers to delay making a home purchase.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 627,000 units is the number of homes that would sell if this pace continued for the next 12 months.
Looking ahead, the NAHB remains optimistic.
“Although this month marks the lowest sales pace since last October, we continue to see solid housing demand due to economic strengthening and positive demographic tailwinds,” said NAHB Senior Economist Danushka Nanayakkara-Skillington. “Builders need to manage rising construction costs to keep their homes competitively priced for the newcomers to the housing market.”
New home sales in July were at a seasonally adjusted annual rate of 627,000, below the revised June rate of 638,000. However, this is 12.8% above the July 2017 estimate of 556,000.
The median sales price of new houses sold in July 2018 was $328,700. The average sales price was $394,300. The seasonally-adjusted estimate of new houses for sale at the end of July was 309,000, representing a 5.9-month supply at the current sales rate.
Regionally, new home sales declined 3.3% in the South but grew 10.9% in the West and 9.9% in the Midwest. The Northeast took the biggest hit as sales plummeted 52.3%.
Commenting on today's report, National Association of Home Builders Chairman Randy Noel said, “A lack of overall housing inventory is pushing up home prices, which is hurting affordability and causing prospective buyers to delay making a home purchase.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 627,000 units is the number of homes that would sell if this pace continued for the next 12 months.
Looking ahead, the NAHB remains optimistic.
“Although this month marks the lowest sales pace since last October, we continue to see solid housing demand due to economic strengthening and positive demographic tailwinds,” said NAHB Senior Economist Danushka Nanayakkara-Skillington. “Builders need to manage rising construction costs to keep their homes competitively priced for the newcomers to the housing market.”