New Home Sales
Rebound in August
Friday, April 11, 2014, Charlotte, North Carolina
From Wells Fargo Economics Group
From Wells Fargo Economics Group
Following a sharp decline in July, new home sales rose 7.9 percent in August to a 421,000-unit annual pace.
While rising mortgage rates likely have softened demand a bit, the rebound in new home sales provides some evidence that buyers will adapt to the increase in rates by scaling back the size of the home purchased.
Sales above $500,000 were weak on the month, while sales below $150,000 rose to the highest level since April 2012. On a regional basis, the South and Midwest showed the largest gains, while sales in the West fell.
Inventories remain exceptionally tight but have increased gradually since the beginning of the year. Inventories rose by 6,000 units in August to 175,000 homes. Much of the gain continues to be in the "not started" category, which increased 9.1 percent on the month.
Looking ahead, builders remain fairly optimistic, with builder sentiment remaining at a cycle high in September. Builder backlogs are also at a historically high level.
Following a sharp decline in July, new home sales rose 7.9 percent in August to a 421,000-unit annual pace.
While rising mortgage rates likely have softened demand a bit, the rebound in new home sales provides some evidence that buyers will adapt to the increase in rates by scaling back the size of the home purchased.
Sales above $500,000 were weak on the month, while sales below $150,000 rose to the highest level since April 2012. On a regional basis, the South and Midwest showed the largest gains, while sales in the West fell.
Inventories remain exceptionally tight but have increased gradually since the beginning of the year. Inventories rose by 6,000 units in August to 175,000 homes. Much of the gain continues to be in the "not started" category, which increased 9.1 percent on the month.
Looking ahead, builders remain fairly optimistic, with builder sentiment remaining at a cycle high in September. Builder backlogs are also at a historically high level.
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