Drop in US home sales less drastic than predicted

September 27, 2016

New home sales in the US last month did not fall by as many homes as had been predicted by economists.

Despite a drop in prices and an increase in inventories, new single-family home sales in the US fell less than expected in August, reported Reuters.

According to the Commerce Department, new home sales slid 7.6 percent to a seasonally adjusted annual rate of 609,000 units in August. Sales increased 20.6 percent over the same period last year. Economists polled by Reuters had predicted last month’s single-family home sales, which make up around 10 percent of total home sales, to fall to a rate of 600,000 units.

Sales figures in July had increased by 5,000 units to 659,000 units — the highest level of annualised sales since October 2007. Last week, a housing report revealed a solid increase in single-family dwelling permits, as the housing market strengthened on the back of a labour crunch that is pushing wages up.

New home sales were buoyed by the lack of previously owned homes entering the market. Last month, new home supply climbed 1.7 percent to 235,000.

Sales of new single-family homes dipped 2.4 percent in the Midwest, 12.3 percent in the South and 34.3 percent in the Northeast. Sales, however, increased 8.0 percent in the West.

Given last month’s sales rate, it would take 4.6 months to clear the housing supply on the market, an increase from July’s 4.2 months.

The US also saw the median price for new homes decline 5.4 percent from the previous year to US$284,000.

 

Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories, email cheryl@propertyguru.com.sg

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