Sales of new single-family homes surged 20.5% month-over-month in August, hitting their highest level since January 2022.
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The jump was also the largest monthly gain in more than two years, according to census data, with sales up 15.4% compared with August 2024.
What makes this jump surprising is that buyers signed those contracts while mortgage rates hovered around 6.6% — higher than they are today. Rates dipped in September, when the Federal Reserve cut its lending rate.
The median price of a newly built home sold in August was $413,500, up 1.9% year over year.
Still, many builders are offering discounts and incentives to lure buyers.
In fact, 38% of builders reported cutting prices in October, which is close to the highest share since the pandemic, according to the National Association of Home Builders. [1]
“Meanwhile, the average price reduction rose to 6% in October after averaging 5% for several months previously. The last time builders reduced prices by 6% was a year ago in October 2024. The use of sales incentives was 65% in October, unchanged from September,” said the report.
Analysts warn against reading too much into the numbers. Robert Dietz, chief economist at the National Association of Home Builders, said revisions could scale back the perceived August gain. The September new residential sales report will be out October 24.
“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,” Dietz told CNBC. [2]
Ivy Zelman of Zelman & Associates, a homebuilder analyst company, told CNBC the higher numbers were “directionally right, but the magnitude was way too high.”
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Zelman’s own survey, which has a larger sample size than the U.S. Census data, showed a sales increase of just 6% year over year.
