US new home sales rise more than expected in August
Sales of new US single-family homes rose more than expected in August, according to data released by the Commerce Department on Wednesday.
New homes sales increased 7.1% on the month to a seasonally-adjusted annual rate of 713,000, surpassing expectations of a 3.5% jump. Meanwhile, July’s sales pace was revised to 666,000.
Compared to the same month a year ago, sales were up 18%.
The median price of a new home was $328,400 in August, up from $305,400 the month before.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The monthly numbers are very erratic - the margin of error in August sales is an enormous +/-20.3% - but the trend in sales tends to oscillate around the pace implied by the path of mortgage applications, with a lag of about three months.
"Reported sales have overshot the mortgage numbers in recent months so we expect a correction in September, but the trend in rising. The strength of mortgage applications in August and September points to sales rising to about 730K by the turn of the year.
"The recent gains in sales have pushed inventory down to an average of just 5.6 months in the three months to August, compared to a peak of 7.0 months in the three months to December last year. If sustained, this will push up prices and trigger rising new construction activity. The housing market is the sole bright spot we see in the fourth quarter."