New U.S. Home Sales Surge Unexpectedly in August
In a surprise turn for the housing market, sales of newly built single-family homes in the U.S. rose 20.5% in August, reaching a seasonally adjusted annual rate of 800,000 units—a sharp increase over July’s revised figures. This marks a 15.4% year-over-year gain compared to August of the previous year.
Driving this jump was a modest but meaningful dip in mortgage rates. The average 30-year fixed mortgage rate fell by 32 basis points over four weeks, landing at 6.26%, its lowest in nearly a year. Alongside this, a recent interest-rate cut by the Federal Reserve has helped fuel renewed optimism among buyers.
Despite the strong monthly gain, sales are still slightly down on a year-to-date basis. Also notable: inventory of new single-family homes for sale fell for the third month in a row, ending August at about 490,000 homes across all stages of construction—1.4% less than in July, though still up about 4% compared to a year ago. With the current sales pace, that puts the months’ supply at 7.4 months, an improvement over the 8.2-month supply one year earlier.
Additionally, builders are increasingly turning to incentives to move homes. In August, 37% reported cutting prices and 66% said they offered sales incentives—tactics aimed at helping persuade buyers in a market still adjusting to higher borrowing costs.
Regionally, the results are mixed. While new home sales in the South are up 3.3% year-to-date, other regions are showing declines: the West down about 7.3%, the Northeast around 22%, and the Midwest near 3.9%