Following a substantial gain in July, the pace of new-home sales held virtually unchanged at a seasonally adjusted annual rate of 373,000 units in August, according to newly released figures from the U.S. Department of Housing & Urban Development (HUD) and the U.S. Census Bureau.
"New-home sales in August effectively tied the pace they set in the previous month, when they were the strongest we've seen in more than two years—so this is really a continuation of the good news we've been getting on the housing front," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Looking at the big picture, sales have been trending gradually upward since the middle of last year as favorable interest rates and prices have driven more consumers to get back in the market for a newly built home."
Regionally, new-home sales gained in all but one area of the country this August, with the Northeast, Midwest and West posting increases of 20 percent, 1.8 percent and 0.9 percent, respectively. The South was the only region to post a decline, of 4.9 percent.
"This latest report indicates that new-home sales continue to run at a steady pace that's well ahead of what we were seeing this time last year, and at this rate, the third quarter of 2012 is going to be well ahead of the second quarter," said NAHB Chief Economist David Crowe. "That said, the razor-thin inventory of new homes for sale is very concerning because it indicates that builders aren't able to access the credit they need to build new homes as demand for them improves."
Crowe also observed that the share of new homes sold in the higher price ranges ($400,000 and above) rose significantly in August.
"This reflects the fact that people who are able to buy homes right now are those in higher-income ranges who have cash and equity on hand, while first-time buyers are having a tougher time getting qualified for a mortgage," said Crowe.
The inventory of new homes for sale held at an historic low of just 141,000 units in August, which is a 4.5-month supply at the current sales pace.