Sales of newly built, single-family homes rose to its highest pace since 2006, up 13.9 percent to a seasonally adjusted annual rate of 901,000 units in July, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The July rate is 36.3 percent higher than the July 2019 pace. New home sales are up 8 percent on a year-to-date basis.
"This is exactly what NAHB's builder confidence survey has been indicating in recent months. Consumers are being driven by low interest rates, a growing focus on the importance of housing and a shift in buyers seeking homes in lower density areas," says Chuck Fowke, chairman of the National Association of Home Builders. "Despite these positive conditions, affordability challenges remain especially as builders are dealing with building cost increases, including a dramatic rise in lumber costs in recent months."
"New home sales are benefitting from the suburban shift, as prospective buyers seek out affordable markets in order to obtain more residential space. Moreover, sales are increasingly coming from homes that have not started construction, with that count up 34 percent year-over-year," says Robert Dietz, NAHB chief economist. "In contrast, sales of completed, ready-to-occupy homes are down almost 24 percent. These measures point to continued gains for single-family construction ahead."
Inventory fell to a 4 months' supply, with 299,000 new single-family homes for sale, 8.8 percent lower than July 2019. The current months' supply is the lowest since 2013. Of the inventory total, just 61,000 are completed, ready to occupy.
