August New Home Sales Highest Since Early 2008

Date: September 28, 2015

Sales Up 5.7% For Month As Demand Rises

According to the latest monthly joint report from the Census Department and the Department of Housing and Urban Development, in August sales of new homes in the US rose 5.7% from July to a seasonally-adjusted annual rate of 552,000. Since August 2014, new home sales are up 21.4%. The median sales price for new homes sold in August was $292,700, while the average sales price was $353,400. At the end of August it was estimated there were 216,000 available new homes, or “a supply of 4.7 months at the current sales rate,” the report said. According to the AP, the median home price only rose $600 from July to August despite rising sales. This came after “aggressively” higher home prices in 2014 that likely made sales for the year flat, totaling only 414,000, “little changed” from the year before. In 2015, “builders have reigned in price increases.” The AP noted that August’s increase in sales meant the strongest monthly sales since February 2008. Sales are said to be increasing due to more hiring and smaller increases in housing costs. RBS Securities economist Michelle Girard noted, “Housing has been an economic bright spot this year and activity in the new home construction market remains solid.” The Wall Street Journal noted that economists had forecast a sales rate of 515,000, meaning August’s total was “well above” projections. Amherst Pierpont Securities economist Stephen Stanley suggested strong sales growth may linger for a few months as poor weather in the first half of 2015 may have caused housing markets to be “busy later into the year than usual.”

What This Means For Small Businesses

The latest news on new home sales is positive particularly for small businesses in the construction sector, though all businesses will benefit on the whole. As the AP explained, strong new home sales and construction “could accelerate the economy by generating construction jobs, demand for more building materials and more spending on landscaping and other services.” Small businesses should be encouraged about this additional positive indicator that the US economy is improving.

Additional Reading

Reuters also reported August new home sales.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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