New home sales fell in August from the previous month as prospective home buyers waited for mortgage rates to fall further.
New home sales in August fell a seasonally adjusted 4.7% to 716,000 units, down from a revised 751,000 units in July, the Census Bureau said Wednesday. On an annual basis, the measure increased 9.8% from last August and beat the Bloomberg consensus forecast for sales to reach a pace of 700,000 units.
Still, the slowdown in monthly sales activity reflects how rising mortgage rates, record home prices and low inventory continue to challenge buyer appetite for new homes.
Mortgage rates remain high, but have been falling since May in anticipation of a Fed rate cut. Last week, the average 30-year fixed mortgage rate was 6.09%.
The Fed cut interest rates by 0.5 percentage point last week and predicted two more cuts this year and four more in 2025.
Many builders are offering favorable terms to home seekers facing affordability challenges. For example, Lennar (LEN) said on its third-quarter earnings call last week that “lower interest rates and incentives have historically allowed demand to access the market.”
New home sales in August fell a seasonally adjusted 4.7% to 716,000 units, down from a revised 751,000 units in July, the Census Bureau said Wednesday. (Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images)
Home purchase applications rose 1% last week, according to Mortgage Bankers Association data released Wednesday.
Meanwhile, housing starts rebounded in August and builders are taking on more projects as borrowing costs are expected to fall. Separate data from the Census Bureau showed new home construction last month rose 9.6% to an annual rate of 1.36 million, the fastest pace since April.
Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.
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