New Home Sales Fall Again

New home sales continued to follow trend in August, falling by 3.4 percent as tight inventories hampered lower-end home buyers, HUD and the Census Bureau reported yesterday.

The report said sales of new single-family houses in August fell to a seasonally adjusted annual rate of 560,000, 3.4 percent below the revised July rate of 580,000 and down by 1.2 percent from a year ago (567,000.)

Regionally, sales fell in the largest region, the South, falling by 4.7 percent to 307,000 units, seasonally adjusted, in August from 322,000 in July and fell by 9.2 percent from a year ago. In the West, sales fell by 2.7 percent to 146,000 units in August from 150,000 in July but improved by 4.3 percent from a year ago.

In the Northeast, sales fell by 2.6 percent to 38,000 units, seasonally adjusted, from 39,000 units in July but improved by 65 percent from a year ago. Sales were unchanged in the Midwest in August at 69,000 units and improved by 4.5 percent from a year ago.

Mark Vitner, senior economist with Wells Fargo Securities, said the missing sales activity from recent hurricanes was apparent in the large drop in sales in the South.

“The Houston metro area accounts for about 5 percent of new home sales, providing an indication of the magnitude of hurricane-related disruptions,” Vitner said. “Storms could make for some bumpy data in coming months.”

The median sales price of new houses sold in August fell slightly to $300,200. The average sales price fell to $368,100. The seasonally adjusted estimate of new houses for sale at the end of August jumped to 284,000, representing a a supply of 6.1 months at the current sales rate.