Steel Markets

New Home Sales See Surprising Jump in August
Written by David Schollaert
September 27, 2022
New, single‐family home sales bounced back in August despite high prices and rising mortgage rates. Although those dynamics have pushed some buyers away, sales of newly constructed homes jumped 28.8% month-on-month (MoM) in August, according to a joint report from the US Department of Housing and Urban Development and the US Census Bureau.
Last month’s surprise surge comes after two consecutive months of declines in June and July. August’s sales were, however, down just 0.1% from a year ago.
Some 685,000 new homes were sold last month at a seasonally adjusted annualized rate, up from a revised 532,000 in July. A year ago, 686,000 newly constructed homes were sold.
Meanwhile, the median price for a new home dropped 6.3% MoM to $436,800 from a revised $466,300 in July. The average price also fell by 6.3% to $521,800 in August from $556,700.
The decline in median and average prices suggests that home builders are open for negotiation as the overall housing market cools.
Home builders reporting lower sale prices reached 24% in September, up from 19% in August, according to the National Association of Home Builders (NAHB). Nearly half said they offered mortgage rate buy-downs and free amenities, among other inducements, to close sales.
That’s led to deteriorating confidence in the industry, with builders’ sentiment falling for the ninth consecutive month in September to a reading of 46. A number below 50 is considered negative.
As a result, builders are pulling back on new construction. Permitting for single-family homes plummeted in August, down 10% to an annualized rate of 1.517 million units, said the US Census Bureau.
New home sales had been trending lower as prospective buyers see their budgets stretched thin by extended construction times, mounting costs, and rising mortgage rates. The average interest rate for a 30-year, fixed-rate mortgage dipped to just below 5% in August, but up from 3.22% in January.
By David Schollaert, David@SteelMarketUpdate.com

David Schollaert
Read more from David SchollaertLatest in Steel Markets

Steel Summit: Schneider sees SDI ‘on the edge of a very good run’
Steel Dynamics Inc. (SDI) President and Chief Operating Officer, Barry Schneider, remains bullish about the Fort Wayne, Ind.-based steelmaker’s position in the current market.

Sheet market participants say sales still in a slump
Across the US and throughout the steel supply chain, market participants are reporting another painfully quiet week for hot-rolled (HR) coil sales.

CRU: Lower sheet prices have pulled back demand for imports
Domestic sheet prices in the US remained under pressure, limiting interest in imports, while domestic prices for longs products continued to rise.

President Trump intends to set additional steel tariffs
While boarding Airforce One on Friday, US President Donald Trump stated that he would be setting more steel tariffs and putting ~100% tariffs on semiconductors and chips.

USS, government officials give update on Clairton Coke Works incident
U.S. Steel, Allegheny County executive Sara Innamorato, and Pennsylvania Gov. Josh Shapiro clarified details from early reports about the Clairton Coke Works facility explosion just one day earlier.