New Home Sales Rise In August

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Low borrowing costs and the demands of the pandemic pushed US existing homes sales to their highest level in 14 years in 2020
Low borrowing costs and the demands of the pandemic pushed US existing homes sales to their highest level in 14 years in 2020 AFP / SAUL LOEB

Sales for new U.S. homes rose more than anticipated in August, marking an increase of 1.5% to a seasonally adjusted rate of 740,000, according to the Commerce Department. 

New home sales reached a four-month high, government data showed on Friday.  The previous month of July showed a revised figure of 729,000.

 

 

 

 

Demand for homes remains solid but builders are struggling due to keep pace due to supply chain shortages and difficulty finding workers. 

“The supply chain for both land and construction is significantly stressed and that will continue into the fourth quarter and beyond,” said Lennar Corp executive chairman, Stuart Miller. 

“The industry will not be able to quickly remedy the supply shortage with increased production. Accordingly, we expect the market to remain in its current balance, or should I say imbalance, for an extended period of time,” Miller added.

According to the Census Bureau and the Department of Housing and Urban Development, the median sales price for a new home is a record $390,900. Out of the homes sold in August, about 22% of them were sold above $500,000 and 9% were sold above $750,000.

There were 378,000 homes sold at the end of August, the most since October 2008. At the current pace, it would take roughly six months to exhaust the supply of new homes.

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