Sales of newly built single-family homes did little to break out at the end of summer. New-home sales plunged 3.4 percent in August to a seasonally adjusted annual rate of 560,000, the lowest sales reading since December 2016, the Commerce Department reported Tuesday. That’s despite the fact that the number of new homes on the market was at its highest level since July 2014.
The disconnect may be more about the types of new-home construction favored by the industry at the moment. “This month’s report is another reminder that builders need to manage rising supply-side costs to meet consumer demand for affordably priced homes,” says Granger MacDonald, chairman of the National Association of Home Builders.
Sales last month dropped by the largest amount in the South, falling 4.7 percent month over month. Hurricane Harvey struck the Houston area last month, and Hurricane Irma’s damage to Florida likely will have an impact on sales over the next few months, the builder’s trade group says.
“We may see more volatility in the next few months as communities affected by the recent hurricanes experience construction delays and other economic disruptions,” says Robert Dietz, NAHB’s chief economist.
Still, new home sales were 7.5 percent higher than the same period a year ago. The inventory of new homes for sale in August was 284,000, a 6.1-month supply at the current sales pace. The median sales price of a new home in August was $300,200.