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US new home sales solid in July

Sales of newly built, single-family homes fell 12.8 per cent to a seasonally adjusted annual rate of 635,000 units in July off a strongly revised upward reading in June, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. On a year-to-date basis, new home sales for 2019 are 4.1 per cent higher than the same period in 2018.

“Builder confidence continues to trend upward as lower interest rates provide for more favourable buying conditions,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.

“New home sales were sharply revised upward in June to a post-recession high annual rate of 728,000,” said NAHB Chief Economist Robert Dietz. “While we continue to see volatility in the monthly numbers, sales continue to trend in a slightly positive direction and are in line with our forecast.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 635,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 337,000 in July, representing a 6.4 months’ supply. The median sales price was $312,800. The median price of a new home sale a year earlier was $327,500.

Regionally, and on a year-to-date basis, new home sales are 7.2 per cent higher in the South and 9.5 per cent higher in the West. Sales are down 15.4 per cent in the Northeast and 12.4 per cent in the Midwest.