New-Home Sales Rise 7.9 Percent in August

NAHB Press Release

WASHINGTON, Sept. 25 - Sales of newly built, single-family homes rose 7.9 percent to a seasonally adjusted annual rate of 421,000 units in August, according to newly released figures from HUD and U.S. Census Bureau. The gain partly offsets a dip in sales activity that occurred in July as consumers reacted to higher interest rates.

"Consumers are adjusting to the reality of today's higher rates following a period of record-setting lows, and today's sales report provides evidence of that," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "We expect to see more buyers coming back to the market as the psychological effects of the rate gains continue to wear off, particularly since, even after the recent spike, mortgage rates remain exceptionally favorable on a historic basis."

"Sales of new homes bounced partway back in August from an unusual low in July," said NAHB Chief Economist David Crowe. "That said, we are only about halfway back to what would be considered a sustainable level of activity in a normal economy, and the ongoing housing recovery continues to be slowed by consumers' concerns about interest rates, as well as weak job growth and uncertainty about what's happening in Washington."

Three out of four regions posted solid gains in new-home sales activity in August. Sales rose 8.8 percent in the Northeast, 19.6 percent in the Midwest and 15.3 percent in the South for the month. The West was the exception to the rule, with a 14.6 percent decline.

While the months' supply of new homes edged down to 5.0 due to the quicker sales pace in August, the total inventory rose for a seventh consecutive month, to 175,000 units.

Higher Mortgage Rates Prompt Pause in New-Home Sales in July

NAHB Press Release

WASHINGTON, Aug. 23 - Sales of newly built, single-family homes declined 13.4 percent to a seasonally adjusted annual rate of 394,000 units in July as higher mortgage rates prompted a temporary pause in buying activity, according to newly released data from HUD and the U.S. Census Bureau.

"The drop-off in sales in July is in part a reflection of buyers' reaction to the recent uptick in mortgage rates as people reassess their budgets to determine how much house they can afford," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "Consumers just need a little time to adjust to the new parameters of the market."

"New-home sales figures refer to newly signed contracts to purchase a home, rather than a completed sale, and it's likely that the higher rates caused some buyers to delay putting pen to paper," explained NAHB Chief Economist David Crowe. "However, there is still a great deal of pent-up demand for homes in markets nationwide, and builders continue to report improving consumer interest. This suggests that what we're seeing is a temporary pause, and that buyers will return to the market once they are confident that the higher mortgage rates are here to stay."

Every region recorded lower new-home sales in July, with declines of 5.7 percent, 12.9 percent, 13.4 percent and 16.1 percent reported for the Northeast, Midwest, South and West, respectively. Meanwhile, the inventory of new homes for sale edged up to 171,000 units in July, which is a 5.2 month supply at the current sales pace.

New-Home Sales Jump 8.3 Percent in June

NAHB Press Release

WASHINGTON, July 24 - Sales of newly built, single-family homes surged 8.3 percent to a seasonally adjusted, annual rate of 497,000 units in June, their fastest pace in the last five years, according to data released today by HUD and the U.S. Census Bureau.

"New-home buyers are returning to the market in larger numbers as firming prices, shrinking inventories of homes for sale and improving local economies convince them that now is the time to make their move," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "Meanwhile, the very low supply of new homes on the market is indicative of the difficulty that builders are having in keeping up with demand due to availability issues with regard to materials, credit, labor and lots for development."

"The takeaway from this report is that the housing recovery is solidly on track and isn't going to be derailed by slightly higher mortgage rates," said NAHB Chief Economist David Crowe. "After years of fence-sitting, buyers are back and are ready to move forward with an investment in homeownership." Looking ahead, he said he anticipates further, though more incremental gains in sales through the end of this year.

Three out of four regions saw solid gains in new-home sales activity in June, with the Northeast, South and West posting increases of 18.5 percent, 10.9 percent and 13.8 percent, respectively. The Midwest posted an 11.8 percent decline following an above-trend bump in activity in May.

The inventory of new homes for sale declined to 161,000 units in June, marking a razor-thin, 3.9-month supply at the current sales pace. The months' supply of homes for sale has not fallen below this level since March of 2004.

New-Home Sales Rise 2.1 Percent in May

NAHB Press Release

WASHINGTON, June 25 - Sales of newly built, single-family homes rose for a third consecutive month in May, posting a 2.1 percent gain to a seasonally adjusted annual rate of 476,000 units, according to data released by HUD and the U.S. Census Bureau today. This is the fastest sales pace recorded since July of 2008.

"Builders are reporting increased demand for new homes as buyers seek to take advantage of historically low mortgage rates while they remain so favorable," observed Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "Consumers in markets nationwide are definitely becoming more confident about making a home purchase as firming prices and tighter inventories provide further evidence of the ongoing housing recovery."

"Today's report confirms that the improvement we have been seeing in housing markets over the past year continues to take place at a gradual and steady pace," said NAHB Senior Economist Robert Denk. "We expect to see more of this positive momentum in the coming months, tempered by the caution that builders are exercising to avoid getting ahead of demand along with ongoing constraints they face with regard to the availability of credit, materials, lots and labor."

Three out of four regions posted sales gains in May, with double-digit increases of 20.7 percent and 40.7 percent in the Northeast and Midwest, respectively, and a more moderate, 3.6 percent gain in the West. The South posted a 9.0 percent decrease following an unsustainably large gain in the previous month.

The inventory of new homes for sale edged up slightly to 161,000 units in May, which is a 4.1-month supply at the current sales pace.

New-Home Sales Rise 2.3 Percent in April

NAHB Press Release

WASHINGTON, May 23 - Sales of newly built, single-family homes rose 2.3 percent to a seasonally adjusted annual rate of 454,000 units in April, according to newly released figures from HUD and the U.S. Census Bureau. The gain builds on a strong upward revision to sales numbers reported for the previous month.

"Builders are reporting an active spring buying season as consumers become more confident about going forward with a new-home purchase along with steadily firming prices in local markets," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "While the cost of constructing homes is rising due to tightened supplies of materials, lots and labor, to some extent, this may be creating greater urgency among potential buyers."

"Today's report is further evidence of the gradual, consistent improvement we have been seeing in housing market conditions over the past year," noted NAHB Senior Economist Robert Denk. "We're now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward."

On a regional basis, new-home sales rose 3.0 percent in the South and 10.8 percent in the West, but fell 4.8 percent in the Midwest and 16.7 percent in the Northeast in April.

The inventory of new homes for sale edged up to a still-thin 156,000 units in April. This is a 4.1-month supply at the current sales pace.