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September 26, 2017
New-home sales down 3.4% in August, lowest level since December
New-home sales decreased 3.4 percent in August – dropping for the second consecutive month to its lowest level since December. However, NAFCU Research Assistant Yun Cohen said the "overall demand for housing remains strong, and the much larger existing-home market remains tight."
"Excess demand will likely spill over from the existing-home market if the price premium for new homes continues to fall," said Cohen in a NAFCU Macro Data Flash report Tuesday.
According to Census Bureau data, new-home sales saw a 1.2 percent decrease from a year ago.
Sales declined in three of the four regions in August. Sales in the South decreased 4.7 percent, followed by the West (-2.7 percent) and the Northeast (-2.6 percent). Sales in the Midwest were essentially unchanged from last month.
"Hurricanes Harvey and Irma will likely slow sales in the South for the next few months," Cohen said. "Some new construction may also be delayed as a result. According to the National Association of Home Builders, builder confidence for new single-family homes fell in September amid concerns that the hurricanes could exacerbate labor shortages and rising material costs."
Based on current-month sales, there were 6.1 months of supply in August, up from 5.7 months in July. The number of unsold homes left on the market rose from 274,000 to 284,000 units. This is 17.8 percent higher than a year ago and represents the largest number of new homes for sale since 2009.
"The inventory-to-sales ratio hit its highest level since July 2014 as sales slowed," Cohen added. "Meanwhile, the median sales price fell significantly."
The median new-home price, non-seasonally adjusted, decreased from $319,900 in July to $300,200 in August. August's prices were 0.4 percent higher than a year ago.
"Excess demand will likely spill over from the existing-home market if the price premium for new homes continues to fall," said Cohen in a NAFCU Macro Data Flash report Tuesday.
According to Census Bureau data, new-home sales saw a 1.2 percent decrease from a year ago.
Sales declined in three of the four regions in August. Sales in the South decreased 4.7 percent, followed by the West (-2.7 percent) and the Northeast (-2.6 percent). Sales in the Midwest were essentially unchanged from last month.
"Hurricanes Harvey and Irma will likely slow sales in the South for the next few months," Cohen said. "Some new construction may also be delayed as a result. According to the National Association of Home Builders, builder confidence for new single-family homes fell in September amid concerns that the hurricanes could exacerbate labor shortages and rising material costs."
Based on current-month sales, there were 6.1 months of supply in August, up from 5.7 months in July. The number of unsold homes left on the market rose from 274,000 to 284,000 units. This is 17.8 percent higher than a year ago and represents the largest number of new homes for sale since 2009.
"The inventory-to-sales ratio hit its highest level since July 2014 as sales slowed," Cohen added. "Meanwhile, the median sales price fell significantly."
The median new-home price, non-seasonally adjusted, decreased from $319,900 in July to $300,200 in August. August's prices were 0.4 percent higher than a year ago.
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