New home sales increase for second consecutive month

Sales of new single-family homes in August were up 1.5% from the previous month, to a seasonally adjusted annual rate of 740,000, according to a report of US Department of Commerce released on Friday. This is the second consecutive month of rising sales for homebuilders, although there is good reason to believe that the height of the frenzy is behind us.

New home sales are down 24.3% from the previous year, and the median selling price of new single-family homes in August 2021 reached $ 390,900, up 20.1% from August. 2020.

“The housing market in the summer of 2021 appears to have stabilized at a level lower than the increase in the second half of 2020 in early 2021,” Ben Ayers, senior economist at At national scale, said in a statement. “Yet new home sales remain high from levels since the real estate crash and show continued strong demand from buyers.”

The number of new homes for sale in August 2021 (378,000) represents a supply of new homes of 6.1 months at the current sales rate, according to the report. This is a 74.3% increase from August 2020 levels and reflects the 17.4% increase in housing starts from a year ago.

Industry experts believe this reflects the continued confidence of home builders, which remains high, despite a recent drop.

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“Builder sentiment remains strong and housing demand is supported by low mortgage interest rates and the shortage of existing homes,” Chuck Fowke, President of the National Association of Home Builders, said in a statement

Despite rising housing starts and maintaining confidence levels among builders, the industry still faces some challenges, including continuing shortages of materials and labor. Due to labor and material issues, many home builders have delayed listing the number of new homes.

“The solid improvement in August sales doesn’t mean builders are clear – building material supply chain issues and labor shortages are still very real challenges for buyers and builders alike. are eager to see resolved ” Zillow Economist Matthew Speakman said in a statement. “It is essential that builders continue to find ways to work around these existing challenges and bring new homes to market in greater numbers, even marginally relieving potential buyers who are exasperated by intense competition and limited housing supply. “

Almost 80% of homes sold in August were either under construction or to be built.

“This report continues to highlight the lingering difficulties facing home builders as they attempt to overcome their current construction backlog, due to a labor shortage and high material costs and outright shortages, “added Mark Palim, deputy chief economist at Fannie Mae.

At the regional level, since the start of the year, new home sales have fallen by 1.0% in the Northeast and 2.3% in the West, but have increased by 4.4% in the Midwest and 4.5% in the South.

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