Improvement on the Home Front
This morning, new home sales for the month of August rose +7.1% to a seasonally-adjusted annualized pace of 713k units. The average from 2017 through 2018 was +616k units, so today’s release suggests that lower mortgage rates may have finally sparked what has been several years of mediocre housing performance. New home sales typically make up around 10% of all home purchases, but they’re more economically significant because in addition to materials purchases, they facilitate the hiring of architects, designers, craftsman, construction workers, title companies and lending agents. The August report indicated that more expensive homes, those priced $400,000 and above, are primarily driving sales. The median price for a newly constructed home in the U.S. climbed +7.5% from $305,400 to $328,400 in August.