Home News U.S. new home sales surge 28.8% in August

U.S. new home sales surge 28.8% in August

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Number: U.S. new home sales surged 28.8% to a seasonally adjusted annualized rate of 685,000 in August from a revised 532,000 the previous month, the Department of Commerce reported Tuesday.

This is the second largest jump on record for new home sales. The pace of sales has reversed sharply from his 8.6% drop in July.

However, sales of new homes are still below the August 2020 peak of 1.04 million units.

Analysts surveyed by the Wall Street Journal had forecast new home sales of 500,000 units in August.

Year-on-year, new home sales are still down 0.1%.

July new home sales fell 8.6% to 532,000 units, compared with initial estimates of 511,000 units, down 12.6%.

New home sales data fluctuates from month to month and is revised frequently.

Key details: The median price for new homes sold in August was $436,800, down from April’s record $458,200.

The supply of new homes for sale fell by 22.1% between July and August, equivalent to 8.1 months of supply.

Geographically, sales of new homes increased in all regions, with a 66.7% surge in the Northeast.

Big picture: The rise may reflect that homebuyers are rushing to buy before mortgage rates rise any further.

Even with interest rates edging toward 7%, the uncertainty over deteriorating macroeconomic conditions is prompting people to act rather than expect prices to fall before jumping in. increase.

For example, a mortgage application increased last weekbuyers appear to be worried about further rate hikes in the coming weeks and months.

what are they saying? Most economists dismiss August’s surge in sales as an exception.

  • Nancy Vanden Houten, chief U.S. economist at Oxford Economics, said: “The pace of August sales is likely to sustain over the next few months as the recent rise in mortgage rates further hits home buying affordability. I don’t think so.” Note. “Further price declines may bring in buyers, but they are holding the bottom,” she said.

  • Robert Dietz, chief economist at the National Association of Home Builders, said August’s new home sales data “are outliers as the temporary recession in mortgage rates ends.” said in a tweetHe added that new home sales are down more than 14% year-to-date and that sales are likely to decline in September as interest rates rise further.

  • “Don’t expect sales to skyrocket,” Pantheon Macroeconomics chief economist Ian Shepherdson said in a report. -18.3%, which is either very large or unsustainable, if it reflects a rush of purchases by people who fixed prices when prices started to surge again.” Sales trend still downtrend. I added that there is.

Market reaction: Dow Jones Industrial Average
DJIA,
-0.06%

and the S&P500
SPX,
+0.09%

rose in early trading on Tuesday. 10 year government bond yield
TMUBMUSD10Y,
3.949%

exceeded 3.8%.

Stocks of Builders, including DR Horton, Inc.
DHI,
+0.16%
,
Renner Company
Len,
+0.87%
,
Parte Group Co., Ltd.
PHM,
-0.18%
,
and Toll Brothers.
Thor,
-0.27%

It opened high in the morning trade.

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