Steel Markets

New Home Sales at Highest Pace in 8 Years

July 25, 2016

Sales of new U.S. single-family homes jumped 3.5 percent to a seasonally adjusted annual rate of 592,000 from a revised May total of 572,000, said the Commerce Department on Tuesday. The increase exceeded analyst expectations for a rate of 560,000. Sales for the first half of 2016 were 10.1 percent higher than the same period last year.

“This positive report is in line with our forecast for a gradual recovery of the housing market,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “For builders to meet the increasing demand for housing, we need to address supply-side headwinds such as shortages of lots and labor.”

“The fact that new home sales reached their highest pace in over eight years shows the housing market is gaining momentum,” said NAHB Chief Economist Robert Dietz. “The market should continue to firm throughout the year, propelled by low mortgage interest rates and solid growth in employment.”

The median sales price in June was $306,700 and the average price was $358,200. Inventory at the end of June was an estimated 244,000 new homes for sale, representing a supply of 4.9 months at the current sales rate.

Regionally, sales were strongest in the West and Midwest with increases of 10.9 percent and 20.4 percent, respectively. Sales fell by 0.3 percent in the South and 5.6 percent in the Northeast.