• New home sales are now at their lowest level since December 2016. They fell in August for the second month in a row, declining 3.4 percent from July to 560,000 units (SAAR), according to the Census Bureau.
• The number of new homes on the market in August increased by 10,000 units, about 3.6 percent from July, to 284,000 units (SAAR), driven by homes for which construction has not yet started.
• The median seasonally adjusted price of new homes sold in August fell 7.5 percent from July to $302,100, retreating from the near-record highs reported in July.

New homes sales fell in August, declining 3.4 percent from July to 560,000 units at a seasonally adjusted annual rate (SAAR). It was the second consecutive month of contracting sales and defied expectations for a small increase, according to the U.S. Census Bureau. As expected, July new home sales were revised modestly upward to 580,000 units, but May and June new home sales were revised downward by a combined 28,000 units (all SAAR). The decline put new home sales down 1.2 percent from last August. Sales are now at their lowest level since December 2016.

Regionally, the South saw the largest month-over-month decline in new home sales, which might be at least partially attributed to Hurricane Harvey. New home sales in the South fell 4.7 percent from July. But the West (-2.7 percent) and Northeast (-2.6 perent), which were unaffected by the South Texas storm, also saw month-over-month declines in sales. If new home sales in the South had declined at a similar pace as new home sales in the West, nationwide sales would still have been down 2.3 percent (compared to a reported 3.4 percent).

Overall, this suggests that the effects of Hurricane Harvey subtracted about 6,400 units (SAAR) from August new home sales.

The number of new homes for-sale increased by 10,000 units (3.6 percent) from July to 284,000 units (SAAR), its highest level since May 2009 and up 17.8 percent from last August. (July inventory was revised downward by 2,000 units.) But inventory is still low by historic standards. The increase in new homes on the market in August was driven mostly by homes for which construction had not yet begun: 71 percent of the month-over-month gain in inventory was among not-yet-under-construction homes.

The median seasonally adjusted price of new homes sold in August fell 7.5 percent from July to $320,100, retreating from the near-record high of $326,500 reported in July and up 0.5 percent from August 2016. Though it has been particularly volatile, the median seasonally adjusted price of new homes sold has been, on average, flat over the past year to year and a half.