Sales of New Homes Post 2nd Consecutive Monthly Increase

Sales of new single-family houses increased 1.5% in August from July, to a seasonally adjusted annual rate of 740,000, according to a monthly report released jointly by the Commerce Department and the Department of Housing & Urban Development.

It was the second consecutive monthly increase in sales, following three months of declines from April through June. July's annual rate was revised upward, to 729,000. Still, August's rate remained 24.3% below the rate for August 2020, the report said.

Prices for new homes remained the same, after the price for July was revised. The agencies originally reported the median sales price in July as $390,500, but revised that upward in today's report to $390,900;  the preliminary median price remained the same for August. That price represents a 20% increase from August of last year.

The cost of constructing houses has soared as builders face shortages of construction materials and prices for those materials have risen during the COVID-19 pandemic. Builders also have faced labor shortages, causing delays in completing projects.

Sales of new homes increased in August from July in three of the four regions nationwide, including rising 26.1% in the Northeast; they fell 31.1% in the Midwest. Compared with a year earlier, however, sales have fallen dramatically in each region: down 46.9% in the Midwest, 37% in the Northeast, 23% in the South and 16.3% in the West.

The seasonally‐adjusted estimate of new houses for sale at the end of August was 378,000, the report said. This represents a supply of 6.1 months at the current sales rate, up just slightly from July's supply of 6.0 months.