Sales of new single-family homes jumped 7.1 percent in August to a 713,000 seasonally adjusted annual rate. Sales are up 18.0 percent from a year ago but remain below the peaks of prior expansions (see chart). Sales rose in two of the four regions tallied: sales surged 16.5 percent in the West, putting sales 17.9 percent above year-ago levels; and sales were up 6.0 percent in the South – the largest region by sales volume – and were 24.9 percent above the year-ago level.
On the downside, sales fell 5.9 percent for the month in the Northeast, matching the August 2018 rate, and sales fell 3.0 percent in the West, leaving that region’s sales rate 7.2 percent below the year-ago pace. Total sales have been recovering from a retrenchment during the November 2017 through October 2018 period largely on gains in the South and the West (see chart). The recovery is getting support from a fall in mortgage rates that began in late 2018; however, it is unlikely to be the start of a new sustained surge in housing activity over the coming quarters.
Total inventory of new single-family homes for sale declined 1.2 percent to 326,000 in August, the third decrease in a row, leaving the months’ supply (inventory times 12 divided by the annual selling rate) at 5.5, down 6.8 percent from July and 12.7 percent below the year-ago level.
Home prices continue to rise, according to the S&P Case Shiller home price index. Home prices across the country were up 3.2 percent for the 12 months through July. That gain is the slowest pace since September 2012. The index is 13.4 percent above the peak index level during the housing bubble in the late 2000s.