The low number of existing homes for sale on the market, the high prices those homes are fetching, and—surprisingly—high mortgage rates have all made purchasing a newly built home more attractive for many would-be buyers. Not that new homes are cheap.
The Commerce Department on Tuesday reported that a seasonally adjusted 675,000 new homes were sold in August, at an annual rate. This was down from July’s 739,000, and below the 695,000 economists expected. Even so, the pace of new home sales so far this quarter has been higher than in the second, and that in turn means housing construction will likely provide a boost to third-quarter growth in gross domestic product.
While down from the surge registered shortly after the pandemic struck, new home sales are around where they were in 2019, which at that point was the best year for sales since 2007.