August New Home Sales: New Sales Soar Past Expectations

• There were 685,000 new home sales nationwide in August (SAAR), up 28.8% from July and down 0.1% from August 2021, according to the U.S. Census Bureau.
• The median sales price of new houses sold in August was $436,800.
• The seasonally-adjusted estimate of new houses for sale at the end of August was 461,000, a supply of 8.1 months at the current sales rate.

A rebalancing of the housing market is continuing to throw the new construction market for a loop. Home builders have been pulling back single-family building activity in the face of diminishing demand for months, but new home sales in August blew the July numbers out of the water, up over a quarter from where they were a month ago. This could be a response to dip in mortgage rates in August, as buyers waiting on the side lines to find anything they can afford were once again able to step into the market and sign a new construction contract with a lower rate. This surprising boost in sales could bolster builder sentiment and produce a stronger outlook for home building activity in the coming months, but with September mortgage rates skyrocketing past six percent, that seems an unlikely outcome. While this transition period might feel like whiplash given the rapid changes from one month to the next, this market rebalancing and equalizing of power is vital to maintain long-term stability and affordability of housing in the years to come.