New Home Sales Decline in August, Yet Year-Over-Year Growth Remains Strong

Home Prices Show Mixed Trends

The data also revealed mixed signals in home prices. The median sales price for new homes in August was $420,600. While this figure suggests the majority of home sales were occurring at relatively high price points, the average sales price jumped significantly higher, reaching $492,700. The gap between median and average prices highlights that a portion of the market consists of high-end sales, skewing the average price upward.

Inventory and Supply

At the end of August 2024, there were approximately 467,000 new homes on the market, representing a 7.8-month supply at the current sales pace. This indicates a relatively balanced market in terms of supply and demand, as a six-month supply is generally considered healthy. However, with sales slowing from the prior month, it suggests a potential buildup of inventory that could pressure future pricing if demand doesn’t rebound.

Market Forecast: Slightly Bearish Outlook

Given the month-over-month decline and higher-than-expected inventory levels, the outlook for the new home sales market leans bearish in the short term. The 4.7% drop from July, coupled with the rising inventory, suggests some cooling off in demand, which could impact pricing and sales volume in the coming months. However, the solid year-over-year growth hints that the market’s longer-term trend remains positive.