New home sales increased 28.8% month-over-month in August to a seasonally adjusted annual rate of 685,000, the U.S. Census Bureau announced. Compared with August 2021, new home sales were down 0.1%.
“The sales gain in August reflects that there is clearly sidelined demand for housing, but it is being constrained by rising interest rates that are pricing many potential consumers out of the market, particularly entry-level buyers,” stated Robert Dietz, chief economist for the National Association of Home Builders. “After a brief lull when mortgage rates fell below 5.3% for much of August, they have since jumped much higher in September and are now approaching 7%.”
Compared with July, new home sales increased 66.7% in the Northeast, 29.4% in the South, 27.5% in the West and 16.7% in the Midwest.
The median sales price of new houses sold in August was $436,800, an 8.2% increase compared with August 2021. “This is a diminished growth rate as a growing number of builders cut prices due to slackening demand,” NAHB stated.
The full new home sales report can be found here.