New Home Sales Flat, Remain At Very Low Level – Median Sales Price Down 0.6 Percent

The pace of new home sales was unchanged in August at an annualized pace of 288,000 units. However, July’s number was upwardly revised to 288,000 (previously reported to be 276,000). Sales fell quite sharply in the late spring after the effects of the homebuyer tax credit wore off. Since the rush of sales leading into April, housing activity has failed to recover to its pre-credit levels.

Like sales in recent months, the median sales price has been volatile in part due to the credit. In August, the median sales price fell 0.6 percent to $204,700, the third decline. From a year prior, prices were down 1.2 percent.

The months supply of inventory of homes at the current sales price fell slightly to 8.6 from 8.7. This was due to builders continuing to reduce their inventories. However, this number remains very high. The historical norm is about 4.5 to 5 months. Values near 8 have historically tended to indicate short term price declines moving forward.