U.S. New Home Sales Post Strong Increase in July
by:Tom Moeller
|in:Economy in Brief
Summary
- Sales are highest since May 2023.
- Median sales price strengthens to four-month high.
- Sales improve throughout country.
The Census Bureau reported that new single-family home sales rose 10.6% (5.6% y/y) during July to 739,000 (SAAR) after improving 0.3% to 668,000 during June, revised from 617,000. Sales fell 9.5% in May to 666,000, revised from 621,000. Earlier figures also were revised. The Action Economics Forecast Survey expected new home sales of 625,000 for July. Sales remained 28.3% below their peak of 1.031 million in October 2020. The latest rise in sales accompanied a decline in the average 30-year fixed-rate mortgage to 6.85% last month from 6.92% in June. It has since fallen to an August average of 6.54% according to Freddie Mac.
The median sales price of a new home rose 3.1% (-1.4% y/y) in July to $429,800 (NSA) from $416,700 in June, after falling 1.7% in May. The median sales price remained 6.6% below its October 2022 peak of $460,300. The average sales price of a new home increased 2.6% (1.4% y/y) to $514,800 in July after rising 0.8% to $501,700 in June. The average price was 4.9% below its peak of $541,200 in July 2022. These sales price data are not seasonally adjusted.
New home sales rose throughout the country last month. New home sales in the West surged 33.8% (9.0% y/y) to 194,000 after falling in four of the prior five months. In the Northeast, sales increased 6.9% (3.3% y/y) in July to 31,000 after rebounding 31.8% in June, a rise which recaptured most of a May decline. Sales in the Midwest rose 9.9% (17.1% y/y) to 89,000 after falling moderately in both of the prior two months. Sales in the South rose 2.9% (2.2% y/y) to 425,000 after rising 0.7% in June.
The number of unsold new homes on the market fell 1.1% (+8.2% y/y) to 462,000 in July following stability in June. It was the lowest level in six months. The seasonally adjusted months' supply of new homes for sale fell sharply to 7.5 months in July from 8.4 months in June. It remained up from a low of 6.9 months in May 2023.
The median number of months a new home stayed on the market edged higher to 2.4 months in July from 2.2 months in June. The reading remained up from the record low of 1.5 months in both September and October of 2022 but down from a high of 5.1 months in March 2021. These figures date back to January 1975.
New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.
Review & Outlook from Federal Reserve Chair Jerome H. Powell can be found here
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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