New home sales in the U.S. unexpectedly showed a substantial rebound in the month of August, according to a report released by the Commerce Department on Tuesday.
The report showed new home sales skyrocketed by 28.8 percent to an annual rate of 685,000 in August after plunging by 8.6 percent to a revised rate of 532,000 in July.
The surge surprised economists, who had expected new home sales to slump by 2.2 percent to an annual rate of 500,000 from the 511,000 originally reported for the previous month.
The sharp increase came after new home sales tumbled to their lowest annual rate since hitting 532,000 in March 2016.
The unexpected rebound reflected significant strength across the country, with new home sales in the Northeast soaring by 66.7 percent to an annual rate of 25,000.
New home sales in the South and West also spiked by 29.4 percent and 27.5 percent, respectively, while new home sales in the Midwest jumped by 16.7 percent.
The report also showed the median sales price of new houses sold in August was $436,800, down 6.3 percent from $466,300 in July but up 8.0 percent from $404,300 in the same month a year ago.
The estimate of new houses for sale at the end of August was 461,000, which represents 8.1 months of supply at the current sales rate. The months of supply is down from 10.4 in July but up from 6.5 a year ago.
“We don’t expect the August pace of sales to be sustained in the months ahead, as the latest rise in mortgage rates will take an added toll on homebuying affordability,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. “Further price declines may bring in buyers, however, keeping a floor under activity.”
Last Wednesday, the National Association of Realtors released a separate report showing existing home sales edged down by much less than expected in the month of August.
NAR said existing home sales declined for the seventh consecutive month but dipped by a relatively modest 0.4 percent to an annual rate of 4.80 million in August after plummeting by 5.7 percent to a revised rate of 4.82 million in July.
Economists had expected existing home sales to tumble by 2.3 percent to an annual rate of 4.70 million from the 4.81 million originally reported for the previous month.
Despite falling by much less than expected, existing home sales still dropped to their lowest level since spring of 2020.
Source: Read Full Article