Sales of new homes retreated in August, one month after surging to the highest level in nearly nine years. Activity fell in all regions of the country except the West.
New home sales dropped 7.6% last month to a seasonally adjusted annual rate of 609,000 units, the Commerce Department reported Monday. That followed a surge in sales in July, when they jumped 13.8% to a rate of 659,000, the fastest pace since October 2007.
Sales had been expected to slow after the July surge.
One problem weighing on the industry is a lack of new and existing homes available for sale. Sales of existing homes slipped 0.9% in August to an annual rate of 5.33 million units.
The median price of a new home sold in August was $284,000, down 3.1% from July and down 5.3% year-over-year.
At the August sales pace, it would take 4.6 months to exhaust the supply of new homes on the market. That’s up from 4.2 months’ supply in July. Both months represent low inventory levels, even though construction of new homes has accelerated for most of this year. Builders would like to boost construction even more, but they face rising costs for land and labor.
By region, sales fell the most in the Northeast, dropping 34.3%. Sales were down 12.3% in the South, and they fell 2.4% in the Midwest. The West, with a rise of 8%, was the only region of the country that saw a sales increase last month.