US New Home Sales Decline in August; Median House Price Decreases, Reports Reuters

Sales of New Single-Family Homes in the U.S. Decline, Potential for Future Demand Growth

Sales of new single-family homes in the United States experienced a decline in August, but falling mortgage rates and house prices could lead to a rise in demand in the coming months.

According to data from the Commerce Department’s Census Bureau, new home sales decreased by 4.7%, reaching a seasonally adjusted annual rate of 716,000 units last month. July’s sales figures were revised upward from 739,000 to 751,000 units.

Economists had predicted a drop in sales, anticipating a rate of 700,000 units, as new home sales, which account for over 10% of the U.S. housing market, can be quite volatile on a monthly basis. Nevertheless, sales in August were up 9.8% compared to the same month a year prior.

The average interest rate on a 30-year fixed-rate mortgage fell to 6.09% last week, the lowest level since February 2023, down from the previous week’s rate of 6.20%.

Additionally, the Federal Reserve recently lowered its benchmark overnight interest rate by 50 basis points, bringing it to a range of 4.75%-5.00%.

The median price for new homes decreased by 4.6% to $420,600 in August compared to the same month last year.