• August new home sales fell to 560,000 (SAAR), down 3.4 percent from July and 1.2 percent from a year ago, according to the U.S. Census Bureau. Initially reported data from July was revised slightly upward by 9,000 units, while data from May and June was revised lower by a combined 28,000 units.
• Inventory of new homes for sale rose 3.7 percent from July and 17.8 percent from a year ago, the biggest annual gain since March 2016. More new homes are available for sale now than at any point since March 2009.
• The median, seasonally adjusted new home price in August fell 7.5 percent in August to $302,100, up 0.5 percent from a year ago.

New home sales ended the summer on a very weak note, and it’s time we stopped sugarcoating the truth with this data — the simple fact is that we are severely under-producing housing in this country, relative both to basic demographics and currently high demand from buyers. Inventory is stuck at roughly mid-1990s levels, but the country has grown by more than 60 million people since then. Buying conditions, in theory, are great right now: Jobs and incomes are growing, and rock-bottom mortgage interest rates are helping keep financing costs low, even for more expensive homes. What’s missing from the equation is a lack of homes actually available to buy at a price point that’s reasonable for most buyers, even with today’s bump in inventory. We’ve been hovering roughly at or below the 600,000 annual sales level for more than a year now, when the market could seemingly easily accommodate sales levels of 750,000 or even much more. While Hurricane Harvey likely held down sales in Texas, its adverse effect on August sales was probably pretty modest at around 6,000 units. It will be worth watching how new home construction and sales activity does or doesn’t pick up in the South in coming months after Hurricanes Harvey and Irma, especially given the region’s traditionally outsized role in the national new construction market. A surge in activity could set the tone for the rest of the country to follow; a lull will only mean the prolonged new home sales slump we’ve been enduring will continue.