New Homes Sales Up 1st Time in 3 Months, NE Soars

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New house sales turned higher for the first time in three months, with sales surging in the Northeast. But experts worry about the effects of the hurricane, rising rates and escalating home prices.

Newly constructed home sales were a preliminary 50,000 single-family houses during August, the Census Bureau and Department of Housing and Urban Development jointly reported Wednesday.

Last month’s sales of newly constructed residential properties brought the total for the first eight months of this year to 448,000 units, according to historical data from the two agencies.

The seasonally adjusted annual rate of new home sales worked out to 629,000, improving 3.5 percent from July’s downwardly revised rate. It was the first time since May the rate was up.

Sales have strengthened 12.7 percent from August 2017’s downwardly revised rate.

National Association of Home Builders Chairman Randy Noel said in a statement from the group that “positive demographics and a strong overall economy” drove up sales.

Tian Liu, chief economist for Genworth Mortgage Insurance, noted in a written statement that a shift to owner-occupied housing “will continue to underpin new home sales because that demand must ultimately result in higher housing construction and sales of new homes.”

But Liu cautioned that rising existing home prices and interest rates
are weakening demand — giving home builders an opportunity to expand sales.

NAHB Chief Economist Robert Dietz warned about market volatility in the coming months due to Hurricane Florence.

In the Northeast, the seasonally adjusted annual rate was 34,000 in August 2018, soaring from the
preceding month by 48 percent — the most of any region. Sales jumped 9 percent in the West to a 168,000 rate, and the Midwest experienced a 3 percent bump to a 77,000 rate.

But in the South, sales slipped nearly 2 percent to a 350,000 rate.

With a seasonally adjusted 318,000 U.S. new houses for sale as of Aug. 31 — the most since it was 311,000 in March 2009 — there was a 6.1-month supply.

Last month’s median U.S. sales price was $320,200, and the average price was $388,400.

Mortgage Expert

Mortgage Daily Staff