In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales.
- Although new home sales were roughly unchanged from July, coming in at 373,000 in August, they are 27.7 percent higher than one year ago. New home sales are measured based on contract signings while existing home sales are based on contract closings.
- Low levels of housing starts and higher sales have brought down inventory. There were 141,000 new single-family homes for sale in August – the lowest level since record keeping began 50 years ago. Months supply in August, a rough indicator of the balance between supply and demand, was 4.5 for the second month in a row, the lowest since October 2005.
- Low inventories and higher demand pushed prices up 17 percent from one year ago, the highest growth since December 2004. New home prices are very volatile, so the magnitude of growth may not persist, but reduced inventory and higher demand will push prices up until builders begin building again.