On September 26, the U.S. Census Bureau reported that sales of new single-family houses in August 2016 plunged 7.6% from a month earlier. This was the biggest month-over-month decline this year.
In August, the seasonally adjusted annual rate of sales of new homes in the U.S. stood at 609,000. In July, it was 659,000. Looking at sales of new homes from bigger perceptive, year-over-year, they increased 20.6%. In August, 50,000 new houses were sold in the U.S. economy. This was the lowest figure since March, when a similar number of new homes were sold. (Source: “New Residential Sales In August 2016,” U.S. Census Bureau, September 26, 2016.)
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Investors and economists use the new homes sales data to examine demand in the housing market, and ultimately how it the demand level could affect the overall economy. Rising sales mean that demand is increasing, and declining sales mean that demand is suppressed.
New home prices witnessed a massive decline as well. In August, the median price of a new single-family home stood at $284,000. This was the lowest price in 2016. Year-over-year, the median price was down 5.4%. In August of 2015, the median price of a new single-family home was $300,200.
The supply for new single-family house edged higher as well. At the end of August, 235,000 houses were available for sale. In July, this figure was 231,000. In August of 2015, the supply was 217,000. This represents an increase of 1.73% month-over-month, and an increase of close to 8.30% year-over-year.
At the current sale rate, the supply would take 4.6 months to be cleared.
Looking at sales of new houses in different geographical areas of the U.S. economy, month-over-month, we see the following. In the north-east, sales of new houses plummeted over 34%. In the mid-west, there was a decline of 2.4%. In the south, sales decreased by 12.27%. The western region of the U.S. economy witnessed an increase in sales of 8.0%.
