Rapid Reaction: August New Home Sales

• August new home sales fell 7.6 percent from July, to 609,000 thousand units sold (SAAR), but remain 20.6 percent above last year's pace.
• Over the year, August new home sales were up in the Midwest (+39.7 percent), West (+35 percent) and Southeast (+15.9 percent), and fell in the Northeast (-25.8 percent). From July, only the West showed gains (+8 percent).
• The median price of new homes sold in August fell 5.4 percent to $284,000, the lowest level since September 2014.

After a solid July, new home sales came back to earth a little bit in August, though last month's data still offer some decent news for the market. The number of new homes for sale rose 8.3 percent year-over-year, and new home sales were very strong in some of the most inventory-constrained areas of the country, notably markets in the West. More homes on the market also helped to push the price of new homes sold in August to their lowest level in almost two years. Builders have been focused on the higher end of the market for much of the past few years, but there are concrete signs emerging that more attention is now being paid to the lower end -- new homes priced in the $200,000-$299,000 range, just below the median price, saw the biggest jump in sales activity. The median price of a new home is still higher than the median price of an existing home, but as more homes come on line, we expect to see prices continue to soften as the year winds down, however modestly, which will give buyers a small bit of breathing room.