New home sales hit 708,000 units during the month of July, an increase of +1% over industry estimates despite three months of declining sales.
New Home Sales in July Surprise Industry Experts
Sales of newly built single-family homes surprised industry experts by increasing +1% beyond estimates. Newly built homes hit 708,000 in July, according to a new report by the US Census Bureau and the Department of Housing and Urban Development.
Realtor.com manager of economic research George Ratiu said, “New home sales rebounded from a three-month slide, as employment gains and summer vacations motivated many families to look for a new home before the start of the school year.”
Kelly Mangold, a principal with RCLCO Real Estate Consultants, said, “It is promising that the overall trend in home sales is up from prior years and that the recent drop in sales has begun to reverse. That means that new home deliveries are coming closer to matching the demand generated by household growth.”
Variable Sales Rates by Locations
Sales rates differed by location. The Northeast and Midwest saw sales volumes decline by more than 20% m/m. Sales of newly built homes in the West posted a gain of +14% in July and the South posted a sales volume increase of +1.3%.
National Inventory Strains Began to Ease in July
The number of new homes for sale by the end of July increased +5.5% m/m and +26% y/y. July’s inventory pf new for-sale homes translated into a 6.2-month supply, the highest level in over a year, according to MarketWatch.
New Home Prices Surge to Record High
MarketWatch also reported that the median price of a newly built home in July hit $390,500, another record high. This median sale price of $390,500 represents an increase of +18.4% y/y, according to Realtor.com.
Realtor.com’s Ratiu said, “Buyers embraced new homes over the past year due to an historically low inventory of existing homes, and shifting preferences for larger homes, backyards, and suburban neighborhoods. However, the spring spike in lumber costs pushed the price tag of new homes to a record high of nearly $400,000 in May, putting new construction out of budget for many buyers.”
Only 24% of new home sales were priced below $300,000 in July, according to Ratiu.
Thanks to Realtor.com and MarketWatch.
