New Home Sales at Highest Pace Since 2006
September 25, 2020
Sales of newly built, single-family homes in August topped the 1 million mark and reached their highest pace since September 2006. Sales increased 4.8 percent to a seasonally adjusted annual rate of 1.01 million units, according to data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The August rate is 43.2 percent higher than the August 2019 pace.
"Surging sales are consistent with record builder confidence levels stemming from higher buyer traffic, historically low interest rates and a shift in demand for lower density markets," says Chuck Fowke, NAHB chairman. "However, higher lumber costs and limited building material availability in some markets signify we could see higher prices down the road."
"New home sales are now 15 percent higher on a year-to-date basis, with gains in all regions," says Robert Dietz, NAHB chief economist. "But with inventory at just a 3.3 months' supply, more construction is needed. The challenge will be whether materials and labor are available."
Inventory fell to a 3.3 months' supply, with 282,000 new single-family homes for sale, 40 percent lower than August 2019. The current months' supply is the lowest in the history of the data series going back to 1963. Of the inventory total, just 54,000 are completed, ready to occupy. The median sales price was $312,800. The median price of a new home sale a year earlier was $327,000.