Washington, DC — Sales of newly built single-family homes jumped 1% in July to 708,000 seasonally adjusted annual figures, according to recently released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This data reflected an expected upward revision of the estimate of new home sales in June.
“New home sales have leveled off this summer after a period of rising costs and strong demand,” said Chuck Fowke, president of the National Association of Home Builders (NAHB) and a Tampa, Fla., custom homebuilder.
NAHB chief economist, Robert Dietz, added: “While new home sales are up 6.9% year-on-year, they are down 27% in July compared to the same time last year. Builders will need to consider the local house prices relative to incomes, given recent increases in building materials and other construction costs.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The house can be in any construction phase: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 708,000 units is the number of homes that would be sold if this pace continued over the next 12 months.
Inventory continues to rise towards more balanced market conditions with a 6.2-month supply, with 367,000 new single-family homes for sale, 26.1% higher than in July 2020. started. As of July 2021, 29% of the new home inventory consists of homes that have not yet started construction, compared to 20% a year ago.
The median sales price was $390,500, an increase of 18.4% from the $329,800 median sales price a year earlier, due to higher development costs, including materials.
Regionally, on a year-to-date basis, new home sales rose in all four regions, up 7.5% in the Northeast, 10.6% in the Midwest, 9.1% in the South and 0.5% in the west. These significant increases are partly due to lower sales volume during the COVID-19 crisis a year ago.