Sales of newly built homes rose much more than 20.5% in August in August, compared to July since January 2022, according to the US Census. It is also the largest monthly profit since August 2022. Sales were 15.4% higher than in August 2024.
This count is based on people who shop in August and sign people who had an average rate on a 30-year fixed mortgage that was higher than today. According to Mortgage News Daily, that rating began at 6.63% in August and didn’t move much that month.
The sharp drop in fees began in September, when the Federal Reserve fell to a three-year low of 6.13% a day before it lowered its lending rates, then moved to a 6.37% location.
Given that prices have not yet been lowered, it is interesting to see that sales in August were extremely high. Some of the answers may be in the research itself.
“We were expecting profits, but it wasn’t that big,” said Robert Dietz, chief economist at the National Association of Home Builders. “It’s always important to remember that new home sales have a large margin. We’ll have to wait for the data points for September next month. We’ll see if this is smooth.”
Builders have spoken a lot about price cuts and incentives, but the median price for new homes sold in August was $413,500, up 1.9% year-on-year. In another survey of builder sentiment from the National Association of Home Builders, 39% of builders reported a price cut in September, increasing the highest percentage in the post-Covid period, from 37% in August.
New home sales are the strongest in the Northeast, and the swing can be large as the overall new construction is lower. It was also strong in the southern part of the busiest home building. Sales were weakest in the West, where prices were higher, but the highest.
“It’s best to be a volatile person every month and keep it smooth, but you have to believe that the high incentives for home builders is the main catalyst for a big surprise to new home sales.” “And of course, we’ll see the impact of lower mortgage rates when the numbers are released in September, but be aware if mortgage rates continue…builders will reduce the pace of implementing incentives and thus offset the profits of lower mortgage rates in new homes.”
Strong sales have led to a drop in stock from nine months in July to 7.4 months in August, dropping nearly 18%. Single-family homes slowed down in August from both July and August last year, allowing. This appears to indicate that builders expect sales to be slow.
