Steel Markets

New Home Sales Slide in August

September 26, 2017

New home sales slipped again in August after tumbling 9.4 percent in July, according to the latest report by Commerce. Sales of new single-family homes fell 3.4 percent from the previous month to a seasonally adjusted annual rate of 560,000. The rate was 1.2 percent below the August 2016 estimate of 567,000.

Some of the decline can be attributed to the impact of Hurricanes Harvey and Irma on sales in the South. Approximately 14 percent of the nation’s single-family housing permits were in the FEMA disaster area. Regionally, the South showed the largest decline for new home sales in August, falling 4.7 percent from July. Sales were down 2.7 percent in the West and 2.6 percent in the Northeast. There was no change in sales in the Midwest.

The median price of new homes sold in August was $300,200 and the average price $368,100. August prices were below the July median sales price of $313,700 and average sales price of $371,200.

Inventory at the end of the month was 284,000 units, representing a supply of 6.1 months at the current sales rate compared to 5.8 months in July.

“This month’s report is another reminder that builders need to manage rising supply-side costs to meet consumer demand for affordably priced homes,” said Granger MacDonald, chairman of the National Association of Home Builders.

“The year-to-date growth shows that new home sales are continuing to make consistent, long-term gains,” said NAHB Chief Economist Robert Dietz. “However, we may see more volatility in the next few months as communities affected by the recent hurricanes experience construction delays and other economic disruptions.”