(Bloomberg) -- US new-home sales fell in August to a five-month low as still-high prices and historically elevated mortgage rates took a toll on the housing market.
Purchases of new single-family homes fell 8.7% to a 675,000 annualized pace following an upward revision to July’s figures, government data showed Tuesday, marking the largest drop in nearly a year. The median estimate in a Bloomberg survey of economists called for a 698,000 pace.
The triple threat of tight supply, elevated prices and historically high mortgage rates continues to weigh on sales. Though builders have been offering incentives in an effort to partially offset some of those pressures, these mounting challenges are keeping many prospective buyers at bay — while forcing others to go as far as canceling deals.
The median sales price of a new home edged lower to $430,300, according to the Census Bureau’s report. Despite the decline, that’s still well above pre-pandemic levels.
A separate report earlier Tuesday showed a national gauge of home prices in the US climbed to a record high in July.
The number of homes sold in August and awaiting the start of construction — a measure of backlogs — ticked higher.
The data showed there were 436,000 homes for sale as of the end of last month, the most since February. That represents 7.8 months of supply at the current sales rate.
Sales fell in all regions except the Northeast.
New-home sales are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close. Those sales fell to a seven-month low in August while prices continued to climb.
The data are volatile, however. The report showed 90% confidence that the change in sales ranged from a 24.3% decline to a 6.9% gain.
--With assistance from Jordan Yadoo.
(Updates with chart.)
©2023 Bloomberg L.P.