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New Home Sales: Sharp Rebound

September 27, 2022
Bottom Line:   New home sales rebounded sharply in August, and there were upward revisions to the sharp declines in July. While the surprise was notable, these August data do little to change the trend, which is firmly lower. Moreover, average and median sales prices were lower, suggesting builders cut offering prices to move bloated inventories. After peaking at over 10 months of sales in July, inventories were still historically high at 8.1 months of sales in August. Overall, this report offers hope that there are buyers still waiting for deals, but the trend for housing still remains firmly lower.
New Home Sales
FELL by 12.6% to 511k, after the prior month was revised higher to 642k. This compared with market expectations for a decline to 575k, from the unrevised June level of 590k.  Sales are now 29.6% BELOW their year-ago level.
The Inventory of Homes Available for Sale
ROSE by 3.1% to 464k. Inventories are now 28.2% ABOVE their year-ago level.
Combined with the decline in sales, the Months' Supply increased to 10.9 months from 9.2 months. This is modestly ABOVE a normal level of 6.0 months.
Home Prices
ROSE with median prices 8.2% ABOVE their year-ago level and with average prices 18.3% ABOVE their year-ago level.
Article by Contingent Macro