U.S. new home sales unexpectedly rose in August 2022. Here's how Reuters covered the most important numbers in the story:
New home sales surged 28.8% to a seasonally adjusted annual rate of 685,000 units last month, the Commerce Department said on Tuesday. July's sales pace was revised higher to 532,000 units from the previously reported 511,000 units....
The median new house price in August was $436,800, an 8.04% increase from a year ago.
What Reuters didn't say is that August 2022's new home prices fell $29,500 (-6.3%) from its revised level of $466,300 in July 2022. That previous month's median new home sale price was itself revised 6.1% higher from the $439,400 it was initially reported to be a month earlier.
At the same time, mortgage rates dipped slightly from July to August 2022, falling from 5.41% to 5.22%. The unexpectedly high number of new home sales would appear to be the result of homebuyers recognizing that respite would likely be very short lived, who then scrambled to lock in the month's combination of lower mortgage rates and lower sale prices.
We'll take a closer look at what those changes mean for new home affordability next week, but for now, we'll look at what the combination of revisions and new information involving new home sales means for the U.S. new home market. Political Calculations' initial estimate of the trailing twelve month average market capitalization for new homes in the U.S. in August 2022 is $29.81 billion, down 5.1% from our initial estimate of $31.40 billion for July 2022.
Meanwhile, our revised estimate for July 2022 is $31.47 billion, a 0.2% increase from our initial estimate, confirming this month represents the peak for this measure in 2022. The large, upward revision in new home sale prices almost fully accounts for that outcome. The latest update of our chart shows U.S.' new home market cap's shifted trailing twelve month average.
We've included the raw monthly data for new home sales and their average monthly sale prices in these latter two charts to illustrate the month-to-month noise in the data. The data for new home sales is typically finalized some three months after it is first reported.
Looking forward, we anticipate September 2022 will see both fewer sales and lesser affordability given the spike in mortgage rates during the month. The next data release for new home sales will come on 26 October 2022.
U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 27 September 2022.
U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 27 September 2022.