Associated Press
- The Census Bureau noted Thursday that the new U.S. Home sales grew 8.8% in August, to ten million units annually.
- That rate was the highest since 2006 and sales have increased for four consecutive months.
- The agency’s estimate of new homes for sale fell to 282,000, reflecting a 3.3-month supply at the current pace of sales. In the data going back to 1963, it is a short period.
- Although the housing market has been one of the bright spots in the virus-ridden economy, some fear that the sector’s boom will soon stall as supply declines.
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Americans extended their winning streak in the housing market in August as Americans continued to take advantage of record-low mortgage rates.
The new census, released by the Census Bureau on Thursday, shows a growth rate of 8. 1.0% to 1.8% year-on-year. This rate was the highest since 2006 and showed a four-month increase. Economists surveyed by Bloomberg expected rates to fall to 890,000 units last month.
The average sale price of new homes fell to 2,312,800 from a year earlier. The average sale price was 9,369,000.
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The July jump was corrected to a higher, rising to 14.7%.
Thursday’s report also revealed growing tensions in housing supply. The seasonal adjusted estimate of new homes for sale fell from 291,000 to 282,000. A recent reading showed a 3.3-month supply at the current selling rate of the housing market, short of the 1963 figures.
The housing market has been one of the few corners of the economy enjoying a V-shaped rebound by the coronavirus epidemic. The Federal Reserve’s March decision to push interest rates closer to zero-cut mortgage rates and boosted home sales. Subsequent messaging of the central bank that will remain low for every year, added fuel to the market turmoil. But some fear the intense rally is on its last legs.
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“While strong demand and low mortgage rates support home sales, slow recovery and weak labor market risks weigh on home sales, which we expect to weigh in the coming months,” said Nancy Vanden Hutten, a researcher at Oxford Economics.
Other indicators have pointed to stable demand in the sector. According to the National Association of Home Builders / Wells Fargo Housing Market Index, homebuilder optimism reached an all-time high in September. Sales of existing homes are also linked to new-unit purchases during the summer.
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