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August New Home Sales Drop After July Surge
Sales of new single-family homes dipped 9.9% to a seasonally adjusted annual rate of 1.237 million units in August following a record level in July, the U.S. Commerce Department reported last week. Sales last month remained 6.2% ahead of the pace a year earlier, and the year’s actual sales through the month were a healthy 7.4% higher than for the same eight-month period of 2004.
“Home builders continue to see solid demand for new homes,” said NAHB President David Wilson. “Our Housing Market Index survey held in a positive range through August as builders reported near-record levels of home sales and maintained a positive view of future sales as well.”
“The Commerce Department’s estimates of new home sales are subject to a high degree of sampling variability, particularly at the regional level,” said NAHB Chief Economist David Seiders. “It’s likely that the July report overstated the strength of sales and that the August report exaggerated the decline. The average for the July-August period is quite close to the second quarter average, and it appears that home sales are plateauing around near-record levels.”
Sales declined in all four regions of the country in August, with especially sharp fluctuations in the Northeast and the West during July and August.
Sales in the Northeast plunged 22% in August, following a 13.6% jump the month before, and dropped 17.9% in the West on the heels of a 23% July surge.
August sales were off 2.2% in the South and 10.6% in the Midwest.
There was an inventory of 480,000 new homes for sale at the end of August, a 4.7 months’ supply at the current sales pace, although 22% of the for-sale units had not yet been started ― a historically high share. Completed homes represented only 22% of the inventory, and units still under construction accounted for 57%.
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