Sales of newly built homes rose a much larger-than-expected 20.5% in August compared with July to the highest level since January 2022, according to the U.S. Census. It is also the largest one-month gain since August 2022. Sales were 15.4% higher than August 2024. This count is based on people out shopping in August and signing deals, when the average rate on the 30-year fixed mortgage was higher than it is today. That rate started August at 6.63%, according to Mortgage News Daily, and didn’t really move much during the month.
The sharp decline in rates began in September, when it fell to a three-year low of 6.13% the day before the Federal Reserve cut its lending rate, and then moved higher to where it is now at 6.37%. Given that rates hadn’t fallen yet, it’s curious that August sales jumped so high. Part of the answer may be in the survey itself. “We were expecting a gain but not that large,” said Robert Dietz, chief economist at the National Association of Home Builders. “Always important to remember the margin of error for new home sales is large. We’ll need to wait for revisions next month and the September data point to see if this is smoothed out.”
Source: CNBC
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