After a lull at the start of summer, August new-home sales ticked up, 3.5 percent to 629,000, according to the Commerce Department. August’s inventory was 318,000, representing 6.1-months’ supply, and the median price was $320,200.
According to Randy Noel, chairman of the National Association of Home Builders (NAHB), affordability is a persistent problem—one that could hamper momentum.
“Sales ticked up in August due to positive demographics and a strong overall economy,” said Noel in an update. “However, housing affordability remains a serious concern. Builders must manage supply-side costs and stiff regulatory hurdles to keep prices competitive.”
The numbers are relative, as well, says Aaron Terrazas, senior economist at Zillow.
“It’s a sign of the times that what might normally be seen as a lackluster new-home sales report is likely to be warmly received [after] an incredibly soft summer—one even softer than initially assumed after [the] large downward revisions to previously reported data,” Terrazas said in a statement. “August represents the second-lowest sales level since October of last year, continuing what has been a very sluggish 2018 on net. Home sellers have been firmly in the driver’s seat of the housing market for the past three years, buoyed by strong demand and tight supply.
“Historically in the face of rising prices, home builders have been quick to ramp up the pace of new construction to meet this demand—but their response has been notably more muted this recovery,” said Terrazas.
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