Housing data released on Thursday showed higher than expected numbers. New Home sales in August soared 4.8%, rising above one million. Analysts at Wells Fargo point out the numbers validate the earlier reported surge in homebuilder confidence, which hit an all-time high of 83 in September, suggesting sales remained strong this past month.
Key Quotes:
“New home sales rose 4.8% to a 1.011-million unit pace. This marks the first time since November 2006 that the pace of new home sales topped 1-million units and is the strongest pace since September 2006. Moreover, sales were revised sharply higher for the prior month and have averaged a 939,000- unit pace over the past three months.”
“The surge in new home sales has cut significantly into the supply of new homes available for sale. On a seasonally-adjusted basis, the number of new homes available for sale fell 3.1% to 282,000, which equates to just a 3.3-month supply at the current sales pace.”
“Homebuilders are clearly selling homes faster than they can build them. All of the decline in inventories occurred among homes already completed or currently under construction. Inventory of not-yet-started homes rose slightly, suggesting that builders are scrambling to secure more lots and open new communities.”
“While the inventory of new homes fell, home prices also decreased slightly in August. The median price of a home, which is not seasonally adjusted, fell for the second month in a row, dropping to $312,800 from $327,800.”
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