U.S. New-Home Sales up 5.7% in August (9/23/15)
Growth driven by pent-up demand, reasonable affordability levels and high rental-occupancy rates
WASHINGTON—Sales of newly built homes rose in August to the highest level since the recession ended, a sign the housing market’s recovery is extending into the second half of the year.
Sales of new, single-family homes rose by 5.7% to a seasonally adjusted annual rate of 552,000, the Commerce Department said Thursday.
Economists surveyed by The Wall Street Journal had expected a rate of 515,000.
The latest figure marks a new a postrecession high, supplanting February’s reading. From February until July, sales had settled somewhat but were well above year-earlier levels. The data largely indicates low-interest rates and stronger job creation are supporting demand for new housing.
July new-home sales were revised up to 522,000 from an initially estimated 507,000.
New-home sales account for about 10% of the home purchase market, with existing homes making up the rest. Month-to-month data can be volatile; August’s increase had a margin of error of plus or minus 16.2 percentage points.
Sales are up 21.6% from August 2014.
The stronger sales figures match home-builder sentiment that is at the highest level in nearly a decade, according to a survey earlier this month from the National Association of Home Builders. The group reports increased buyer traffic and improving sales conditions, though builders are concerned about future sales conditions, including the expectation that interest rates will rise later this year.
Meanwhile, sales of existing homes have returned levels recorded just before the recession began in 2007, though they slipped in August after a strong start to the year, according to data from the National Association of Realtors.
Thursday’s report showed August’s median sales price of new homes was $292,700, a 0.3% rise from a year earlier. The number of new homes for sale rose by 1,000 in August from a month earlier to 216,000. At the current sales pace, it would take 4.7 months to exhaust the supply of for-sale new homes, from 4.9 a month earlier. http://www.wsj.com/articles/u-s-new-home-sales-up-5-7-in-august-1443103942?cb=logged0.9694351352454062