Steel Markets

New Home Sales Up by 7.9%

September 26, 2013

New home sales rose by 7.9 percent in August to a seasonally adjusted rate of 421,000 from the revised July rate of 390,000 (from an earlier estimate of 394,000) according to the U.S Census Bureau and the Department of Housing and Urban Development. Sales were slightly below expectations of 425,000 for August, showing weakness compared to the first half of 2013.

The median sales price of new homes in August was $254,600 and the average sales price was $318,900. At the end of August the seasonally adjusted estimate of new houses for sale stood at 175,009—a five month supply at current sales rates. Housing prices are up more than 12 percent from pricing in August 2012.

A shortage of available lots and difficulty for builders to get credit was blamed for the decrease in new home sales. A positive sign for homebuilders and economic watchdogs is the time on market has been decreasing steadily since April 2013 from 4 months to 3 months in August.

Home sales were highest in the Southern and Midwest regions, rising by 19.6 percent and 15.3 percent, respectively. Northeast sales increased by 8.8 percent. New home sales fell in the West by 14.6 percent. Sales compared to August 2012 were up across the board except in the West which was down by 21.2 percent.