New residential home sales rose 3.5 percent in August, a better-than-expected turnout that reverses two-straight months of declines, according to a new residential sales report released Wednesday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
New single-family home sales rose 3.5 percent month-over-month to a seasonally adjusted rate of 629,000 units — a 12.7 percent year-over-year uptick, according to the Monthly New Residential Sales Report. The average sales price clocked in at $388,400 according to the report. Residential sales in July, meanwhile, were revised down to 608,000 homes from the previously reported 627,000, according to a separate Census report.
The Midwest led all regions in home sales, with a 13.2 percent hike, while the Northeast stood alone as the only region to should a dip in residential homes sales, tallying a 12.8 percent decrease in sales, according to the report. The South region experienced an 8.4 percent increase in sales and the West boasted a 5.9 percent increase, according to the report.
The estimate of new homes for sale at the end of August was 318,000, which represents a 6.1-month supply at the current sales rate.
Although growth remains sluggish, the increase in inventory shows builders are steadily working to meet buyer demand, which has remained strong, Realtor.com Chief Economist Danielle Hale said in a prepared statement.
“While the sales increase in August was healthy from a year ago (+12.7 percent), it was only a modest gain (+3.5 percent) from the lowest new home sales figure of 2018,” Hale said. “The number of completed new homes for sale has been very gradually increasing and today’s data shows that August hit the highest level since spring 2011.”
“This suggests that builders are taking some measured risks to meet housing demand,” she added. “Median months for sale for new homes tied last year’s record low of 2.8 months, suggesting that demand for new homes remains steady despite sluggish sales levels.”
The news, while positive, comes as homebuyers continue to face rising mortgage rates and higher home prices.
The Census Bureau and HUD use sample surveys to collect data for their home sales, meaning the data is subject to sampling variability as well as the typical statistical variance. The survey is based on a sample of houses pulled from building permits. “Sales” are defined as deposits taken or sales agreements signed, not necessarily closings.