- Sales of new US homes accelerated by 4.8% in August, to an annual rate of 1 million units, the Census Bureau reported Thursday.
- That rate was the highest since 2006 and marked four consecutive months of increasing sales.
- The agency’s estimate of new homes for sale fell to 282,000, reflecting 3.3 months of supply at the current pace of sales. That’s the shortest period in data going back to 1963.
- Though the housing market has been one of the few bright spots in the virus-rattled economy, some fear that dwindling supply will soon halt the sector’s rally.
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The US housing market extended its winning streak into August as Americans continued taking advantage of record-low mortgage rates.
Sales of new homes leaped by 4.8%, to a seasonally adjusted annual rate of 1.01 million units, the Census Bureau announced Thursday. The rate was the highest since 2006 and marked four months of increases. Economists surveyed by Bloomberg had expected the rate to drop last month to 890,000 units.
New homes’ median sale price fell from the year-ago period, to $312,800. The average sale price was $369,000.
July’s jump was revised higher, to a 14.7% gain.
The Thursday report also revealed a growing strain in housing supply. The seasonally adjusted estimate of new homes for sale fell to 282,000 from 291,000. The latest reading represented a supply of 3.3 months at the housing market's current rate of sales, the shortest period in data going back to 1963.
The housing market has been one of the few corners of the economy enjoying a V-shaped rebound through the coronavirus pandemic. The Federal Reserve's decision in March to push interest rates close to zero lowered mortgage rates and spurred a pickup in home sales. The central bank's subsequent messaging that rates would stay low for years added fuel to the market resurgence. But some fear that the sharp rally is on its last legs.
"While strong demand and lower mortgage rates are supportive of home sales, the slow recovery and weak labor market pose downside risks that we expect will weigh on home sales in the months ahead," said Nancy Vanden Houten, a researcher at Oxford Economics.
Other indicators have pointed to lasting demand in the sector. Homebuilder optimism reached an all-time high in September, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Sales of existing homes have trended in line with new-unit purchases through the summer as well.
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