Sales of new single-family homes dropped to a seasonally adjusted annual rate of 1.237 million units in August following a record buying surge the month before, the U.S. Commerce Department reported. Despite a 9.9 percent decline from July's record pace, the August sales rate was 6.2 percent above a year ago and actual sales-to-date were 7.4 percent higher than at this point last year.
"The Commerce Department's estimates of new home sales are subject to a high degree of sampling variability, particularly at the regional level," said National Association of Home Builders (NAHB) Chief Economist David Seiders. "It's likely that the July report overstated the strength of sales and that the August report exaggerated the decline. The average for the July-August period is quite close to the second quarter average, and it appears that home sales are plateauing around near-record levels."
All four regions across the country posted decreased sales in August, with two regions, the Northeast and the West, experiencing the most flux during the past two months. Sales in the Northeast were down 22 percent, following a 13.6 jump the month before while the West dipped 17.9 percent following an almost 23 percent surge in July. Sales in the South were down 2.2 percent and Midwest dropped 10.6 percent for the month.
The inventory of new homes for sale was 480,000 at the end of August, a 4.7 months' supply at the current sales pace, although 22 percent of the for-sale units were not yet started--a historically high share. Completed homes represented only 22 percent of the inventory, and units still under construction were 57 percent of the total.
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