New Home Sales Sales Climb to Seven-Year High in August

HUD and the U.S. Census Bureau jointly announced Thursday the new residential sales reached a seasonally adjusted annual rate of 552,000 in August 2015, the highest level since February 2008.

The report showed that sales increased 5.7 percent above the revised July rate of 522,000 and 21.6 percent above the August 2014 estimate of 454,000.

"The steady, albeit modest, progression of new home sales reflects the steady increase in economic improvement, in job additions and consumer confidence," said David Crowe, chief economist and SVP, NAHB. "Home buyers are taking advantage of historically low mortgage rates, and pent up demand from years of a slow housing recovery."

HUD and the Bureau found the median sales price of new houses sold in August 2015 was $292,700, while the average sales price was $353,400.

The seasonally adjusted estimate of new houses for sale at the end of August was 216,000, representing a supply of 4.7 months at the current sales rate.

"A faster sales pace and difficulties acquiring buildable lots and labor have constrained builders’ ability to respond to growing demand," Crowe said. "However, the single largest constraint has been the lack of demand and the slow resale market which is the source of most new home buyers."

On a regional level, sales increased 24.1 percent in the Northeast, 7.4 percent in the South, and 5.4 percent in the West from July to August. Meanwhile, sales declined 9.1 percent in the Midwest. Annual increases were all double-digit, ranging from 21.6 percent to 11.4 percent in the West.

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