New home sales sizzle in August

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Sales of newly built, single-family homes in August topped the 1 million mark and reached their highest pace since September 2006, according to a report from the National Association of Homebuilders.

Sales increased 4.8 percent to a seasonally adjusted annual rate of 1.01 million units, according to data sourced from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The August rate is 43.2 percent higher than the August 2019 pace.

“Surging sales are consistent with record builder confidence levels stemming from higher buyer traffic, historically low interest rates and a shift in demand for lower density markets,” NAHB’s chairman Chuck Fowke, a custom home builder in Tampa, Fla., said in a statement. “However, higher lumber costs and limited building material availability in some markets signify we could see higher prices down the road.”

“New home sales are now 15 percent higher on a year-to-date basis with gains in all regions,” added NAHB’s chief economist Robert Dietz. “But with inventory at just a 3.3 months’ supply, more construction is needed. The challenge will be whether materials and labor are available.”

The Northeast and Midwest each posted gains of 23.6 percent. The South and West were up 13.9 and 12.4 percent, respectively.

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This article was originally published in the November 2020 issue.

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