First American Deputy Chief Economist On August New-Home Sales Data
First American Deputy Chief Economist Odeta Kushi reports on the recent new-home sales data for August.
August New-Home Sales – New-Home Market Remains Poised to Outperform Existing-Home Market, Despite Monthly Sag in Sales
- “While existing-home sales have struggled to gain any momentum, the new-home market has remained a relative bright spot in the housing market due to builders’ ability to offer incentives and bring buyers off the sidelines. There is better news on the horizon, however. According to NAHB, builder sentiment increased in September as mortgage rates declined by more than one-half of a percentage point from early August through late-September. Additionally, builders now have a positive view for future new-home sales for the first time since May 2024.”
- “The long-term housing shortage, lower mortgage rates, and builders’ ability to offer incentives will help to buoy new single-family sales. However, builders continue to grapple with challenges stemming from the “5 Ls”: labor, lots, legal issues, lumber, and lending. Despite the challenges, the new-home market will likely continue to outperform the existing-home market over the near term because, unlike existing homeowners, builders are not rate locked-in.”
Just the data:
- “New-home sales in the U.S. reached 716,000 units in the latest report, surpassing the predicted of 700,000, and the July figure was revised up.”
- “Despite the monthly decline, sales are up nearly 10 percent from a year ago. Additionally, new-home sales are 19 percent above the pre-pandemic, five-year average.”
