August 2024: New Home Sales Fell In August, But Remain Higher Than Expected - Zillow Research
In August 2024, new single-family home sales nationwide reached 716,000 (SAAR), marking a 4.7% decline from the revised July rate of 751,000. However, this figure is still 9.8% higher than the August 2023 estimate, as reported by the U.S. Census Bureau.
The median price of new houses sold in August 2024 was $420,600, reflecting a 4.6% decrease from the previous year. The seasonally-adjusted estimate of new houses for sale at the end of August stood at 467,000, which translates to a supply of 7.8 months at the current sales rate. This is an increase from 7.3 months in July but a slight decrease from 7.9 months in August 2023.
Newly built home sales saw a decline in August following an upward revision to the July estimate. Over the past year, the Midwest experienced the most significant increase in new home sales, attributed to relatively more affordable housing in the region.
Despite easing mortgage rates since May and an improvement in housing affordability in August, both existing and new home sales fell last month. Nevertheless, new home sales remain higher than in August 2023.
Typically, home buying activity declines during this time of year. However, the slowdown in new home sales might be temporary. Recent survey data from the National Association of Home Builders indicated an increase in builder confidence and a reduction in the share of builders cutting prices or offering incentives. Additionally, the average price reduction fell for the first time since July 2022.
Housing affordability has been a persistent issue, causing many renter families to delay homeownership. While rents for single-family homes continued to rise, the recent decline in mortgage rates led to a 2.9% decrease in mortgage payments on a typical U.S. home compared to a year ago, according to Zillow data.
The typical new renter of a single-family home experienced a 4.5% rent increase over the past year. Improved affordability and increased for-sale inventory have provided potential buyers with more options. The combination of higher inventory and lower mortgage rates has created an ideal market entry point for potential first-time homebuyers.
