New home sales grew 1.5% in August to an adjusted rate of 740,000, the U.S. Census Bureau reported. Compared with August 2020, new home sales increased 2.4%.
"After the volatility of 2020, with significant declines for new home sales in the spring followed by an unsustainable rebound during the second half of the year, new home sales have cooled somewhat," stated Robert Dietz, chief economist for the National Association of Home Builders. "Home prices are up 20% (to $390,900) from a year ago due to higher construction costs, and these price hikes are a risk for housing affordability as we approach the end of the year."
New home inventory was 378,000, up 74.3% compared with August 2020. However, a growing number of new homes have yet to begin construction, according to NAHB. As of August 2021, 28% of new home inventory consisted of homes not having started construction, compared with 21% a year ago.
Regionally, year-over-year new home sales fell 1.0% in the Northeast and 2.3% in the West. The Midwest and South recorded year-over-year increases of 4.4% and 4.5%, respectively.
