New-Home Sales Flirt With 12-Year High

New-home sales rose to 713,000 in August, up 7.1% from a revised figure of 666,000 in July and just shy of a 12-year high set in June.

The overall trend suggests that sales activity is indeed rising in 2019. The average rate so far this year is 671,000, says High Frequency Economics chief economist Jim O’Sullivan, which is up from the pace of 615,000 for all of 2018.

Home sales did not increase across all the major regions throughout the United States. While home sales activity revved up in the South and the West, it slowed in the Northeast and Midwest.

At the end of August, the government estimated there was a 5.5-month supply of homes available for sale, slightly below the six-month threshold that represents a balanced market. In December, the supply of homes peaked around seven months. The decline since then could push new-home prices higher and encourage builders to ramp up construction activity, Pantheon Macroeconomics chief economist Ian Shepherdson said.

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