Newly built, single-family homes saw a slight dip in sales volume in August from the previous month, but don’t fret — sales volume is still up massively year-over-year.
In August, purchases rang in at a seasonally-adjusted annual rate of 609,000 units, according to data released by the Department of Housing and Urban Development and the Census Bureau. The rate is down 7.6 percent from July, but up 20.6 percent since August 2015.
“Demand conditions are positive,” National Association of Home Builders chief economist Robert Dietz told The Real Deal. “Although August was down, it was month was the second highest month we’ve seen since the Recession.”
In the Northeast, new home sales recorded in August dropped 34.3 percent from the month prior. New home sales also fell in the South by 12.3 percent and 2.4 percent in the Midwest. The West, on the other hand, saw an increase of 8 percent from July.
The overall distribution of home building is concentrated in the West and the South, according to Dietz, because of population gains in these areas.
August’s median sales price for newly built homes was $284,000, the Census report showed, and the average sales price was $353,600. At the end of August, there were 235,000 new homes for sale — that’s under a five-month supply, which points to a market that’s below the healthy threshold, Dietz said.
“If you look at overall builder inventory, it’s quite tight,” he said, “which provides opportunity for builders and leads to the extension into a lower price range — between $200,000 and $300,000.”
In turn, demand will continue to grow in 2017, he added.
A previous NAHB report found that U.S. home builder confidence rose to pre-recession levels in September, jumping six points on the confidence index to 65 out of 100 between August and September. Any rating over 50 means home builders see the market as healthy.
“Multifamily construction is leveling off,” Dietz said, “and what we’re seeing now is a switch to the single-family side when it comes to housing growth.”