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Economy in Brief

U.S. New Home Sales Improve Modestly in July
by Tom Moeller  August 24, 2021

• Sales increase follows three straight months of decline.

• Monthly changes are mixed amongst regions.

• Median home prices rebound to record high.

The new home market recovered modestly last month. Sales of new single-family homes rose 1.0% (-27.2% y/y) during July to 708,000 (SAAR) following a 2.6% June decline to 701,000, revised from 676,000. Despite the improvement, sales were 28.7% below their January peak of 993,000. May sales were revised to 720,000 from 724,000 estimated last month. The Action Economics Forecast Survey expected 700,000 sales in July.

Last month's sales improvement was led by the West where sales rose 14.4% (-11.9% y/y) to 215,000 following three straight months of moderate improvement. Sales in the South gained 1.3% (-28.4% y/y) to 400,000, after declining for three consecutive months. Offsetting these increases was the Northeast where sales fell 24.1% (-47.6% y/y) to 22,000, the lowest level since the recession low in April of last year. Sales here have fallen from a peak of 52,000 in June 2020. Also working lower in July were sales in the Midwest, which fell 20.2% (-44.1% y/y) to 71,000, the lowest level since October 2019. Sales here posted a peak of 124,000 in January of 2021.

The median price of a new home rebounded 5.5% last month (18.4% y/y) to a record $390,500 following a 4.4% decline during June. The average sales price of a new home increased 3.8% (17.6% y/y) to a record $446,000. These prices are not seasonally adjusted.

The supply of new homes for sale rose to 6.2 months in July, up from a low of 3.5 months from August through October of last year, and the most since April 2020. The median number of months a new home stayed on the market fell to 3.5 in July, down from the nine-year high of 5.1 months in March.

New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

U.S. New Single-Family Home Sales (SAAR, 000s) Jul Jun May Jul Y/Y % 2020 2019 2018
Total 708 701 720 -27.2 828 683 614
  Northeast 22 29 43 -47.6 37 30 32
  Midwest 71 89 84 -44.1 94 72 75
  South 400 395 408 -28.4 476 399 347
  West 215 188 185 -11.9 221 182 159
Median Price (NSA, $) 390,500 370,200 387,300 18.4 334,992 319,267 323,125
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