New-Home Sales Rise as Consumers Adjust to Higher Interest Rates
Sales of newly built, single-family homes rose 7.9% to a seasonally adjusted annual rate of 421,000 units in August, according to figures released by HUD and the U.S. Census Bureau on Sept. 25.
The gain partly offset a dip in sales activity that occurred in July as consumers reacted to higher interest rates.
- Sales activity rose 8.8% in the Northeast
- 19.6% in the Midwest
- 15.3% in the South.
- The West was the exception to the rule, with a 14.6% 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.
NAHB Chief Economist David Crowe said the partial bounce-back in sales in August was a good sign that consumers are coming to terms with the higher rates and heading back to the marketplace. However, he noted, "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.”
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- Joanne Loftus