Fewer Homes Being Sold, Albeit With Higher Prices

Two new housing data reports issued this morning determined there were fewer new single-family homes being sold while the residential properties being purchased were priced higher.

Sales of new single‐family houses during August were at a seasonally adjusted annual rate of 675,000, according to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. This is an 8.7% decline from July’s revised rate of 739,000, but it is also 5.8% above the August 2022 estimate of 638,000.

The median sales price of new houses sold last month was $430,300 while the average sales price was $514,000. The seasonally adjusted estimate of new houses for sale at the end of August was 436,000, which represents a supply of 7.8 months at the current sales rate.

Separately, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 1% annual change in July, up from a 0% change in June. The 10-City Composite showed an increase of 0.9%, compared to the -0.5% loss in the previous month, while the 20-City Composite posted a year-over-year increase of 0.1%, improving from the -1.2% drop in the previous month.

Eight of 20 cities tracked by this index reported lower prices and 12 reported higher prices in the year ending July 2023 compared to the year ending June 2023. Also, 18 out of the 20 cities showed a positive trend in price acceleration compared to their prior month.

Craig J. Lazzara, managing director at S&P DJI, stated “The increase in prices that began in January has now erased the earlier decline so that July represents a new all-time high for the National Composite. Moreover, this recovery in home prices is broadly based. As was the case last month, 10 of the 20 cities in our sample have reached all-time high levels. In July, prices rose in all 20 cities after seasonal adjustment and in 19 of them before adjustment.”

“On a year-to-date basis,” he added, “the National Composite has risen 5.3%, which is well above the median full calendar year increase in more than 35 years of data. Although the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”