New Homes Sales nationwide down due to hurricanes, New Homes Sales in Midwest remain unchanged, Home Price Index showed increase
September 26, 2017
The Commerce Department reported on Tuesday that Hurricanes Harvey and Irma impacted New Home Sales data in August, driving it down 3.4% from July to an annual rate of 560,000 annualized units. This was below the 577,000 expected and an eight-month low. The storm destruction hampered reporting, the Commerce Department said, with “information on the sales status at the end of August collected for only 65% of cases in Texas and Florida counties” affected by the hurricanes. That compares to a normal response rate of 95%.
New Home Sales were 1.2% lower than August 2016, falling in the Northeast, South and West while remaining unchanged in the Midwest. The median sales price of new houses sold in August 2017 was 0.4% higher than last year. Finally, new home inventory had a 6.1- month supply in August, up from 5.7 in July. A six-month supply is seen as a healthy balance between supply and demand.
The S&P Case Shiller 20-city Home Price Index showed a 5.8% increase from July 2016 to July 2017. Gains continue for home prices due in part to limited homes for sale and a robust jobs market. This pace remains double the average wage growth and is unsustainable for the long term – something will have to give. Either wages grow or price gains ease. On a national level, prices rose 5.9% in July from a year ago. A spokesperson from Case-Shiller said home price gains have largely come from the Pacific Northwest.