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Sales of newly built single-family homes in August reached their fastest pace since September 2006, the Commerce Department reported Thursday. They also attaine…See More
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Sales of newly built single-family homes in August reached their fastest pace since September 2006, the Commerce Department reported Thursday. They also attained another landmark: topping 1 million sales, to a seasonally adjusted annual rate of 1.01 million units. That marks a 43% jump when compared to last year.
“Already, more new homes have sold in 2020 than did in all of 2019,” says Danielle Hale, realtor.com®’s chief economist. “With the number of existing homes for sale down consistently and considerably from a year ago, new homes are an important segment of opportunity for home shoppers.”
But inventory levels of both existing and new homes may be preventing sales from stretching even higher. Housing inventories of existing homes is down 18.6% compared to a year ago. New-home sales fell to a 3.3-month supply in August.
“More construction is needed,” NAHB Chief Economist Robert Dietz says. “The challenge will be whether material and labor are available.”
Higher lumber costs and the limited availability of building materials in some markets is leading to higher prices in new-home construction. Lumber prices are now up more than 170% since mid-April, adding more than $16,000 to the price of a typical new single-family home, according to the NAHB.
The median price of a new home in August was $312,800. New-home sales were up on an annual basis in all four major regions of the U.S. The Northeast and Midwest each posted a 23.6% increase in August. The South saw sales rise 13.9%, and the West posted a 12.4% gain.
Source: National Association of Home Builders and “New Home Sales Surge to Highest Level Since the Great Recession,” MarketWatch (Sept. 24, 2020)

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