Economy

New Home Inventory Crosses 6-Month Supply Mark as Sales Lag

New Home Inventory Crosses 6-Month Supply Mark as Sales Lag”

Sales of new USA homes slumped 3.4 percent in August, the second straight monthly decline.

The decline surprised economists, who had expected new home sales to climb to a rate of 583,000 from the 571,000 originally reported for the previous month.

And the sales pace was 1.2 percent below the rate in August 2016. The June rate was revised upward by 9,000.

But August's drop in new home sales also points to the limits of the rebound from the Great Recession and the housing bust that triggered the downturn a decade ago.

Sales of new homes fell in August and were running below the pace of previous year, the U.S. Census Bureau reported. Ratiu said the 4.7 percent decline in the South reflected the damaging impact of Hurricane Harvey, which made landfall in southeast Texas on August 26.

At the same time, the number of new single-family homes for sale across the county ticked up another 3.4 percent to 284,000 which is the most available inventory since May of 2009 and 17.8 percent higher versus the same time a year ago.

Sales fell sharply in the US South, dropping 4.7 percent, and in the West and Northeast, declining by 2.7 percent and 2.6 percent, respectively. The number of houses for sale in August was the highest so far in 2017.

Impediments to construction, including scarce labor and rising costs for materials, have meant that supply has not kept pace with demand. Fewer new homes priced below $200,000 are coming onto the market.

"Builders will have difficulty finding skilled construction workers that are in short supply - residential construction employment is just touching 2002 levels, as employment in other sectors have long-passed 2002-07 levels".



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