New Home Sales Data for 2022
New Home Sales, commonly referred to as “new residential sales,” is an economic indicator that tracks the sale of newly constructed residences. It is extensively watched by investors since it is seen as a lagging signal of real estate market demand and, thus, a factor influencing mortgage rates. Household income, unemployment, and interest rates are all variables that influence it.
The United States Census Bureau releases two versions of the New Home Sales metric: a seasonally adjusted figure and an unadjusted one. The adjusted value is shown as a yearly total, whereas the unadjusted figure is presented as a monthly total. These numbers are provided for several areas and the entire nation.
New home sales are completed when a sales contract or deposit is signed or accepted. In any stage of construction, the home might be: not yet started, in the process of being built, or fully finished. About 10% of the US housing market is made up of new house sales. Preliminary numbers for new single-family home sales are subject to major changes because they are mostly based on data from construction permits.
New Home Sales Report August 2022
The Census Bureau and the Department of Housing and Urban Development reported that new house sales increased by a stunning 28.8% month-over-month in August, contrary to the general trend of a housing market slowdown. After a 12.6% fall in July, experts anticipated another minor slowdown in annual sales, but the actual figure of 685,000 exceeded expectations by almost 500,000.
Compared to July, sales increased by 28.8%, the largest monthly rise since June 2020. The median price of a new home sold in August was $436,800, a 0.3% decrease from July. Mortgage rates increased more than double as compared to the past year, but a decrease in July may have brought out buyers. Homebuyers who were on the fence may have been influenced by increased new house inventories.
Other evidence implies the housing market is slowing, including data showing home prices rose 15.8% yearly in July, down from nearly 20% in June. The South drove the rise in new home sales. Despite the August boost, new home sales are predicted to be sluggish in 2022. New single-family housing construction has stagnated, and residential building permits are down. Builder confidence has plummeted as a result of rising costs, higher interest rates, and slower buyer traffic.
The seasonally‐adjusted estimate of new houses for sale at the end of August was 461,000. This represents a supply of 8.1 months at the current sales rate. The Federal Reserve's vigorous campaign of monetary policy tightening to slow the economy and manage inflation was having some desired effects on the housing market. A total housing market crash is improbable, however, while home values remain elevated and there is a severe dearth of previously owned properties.
More New Home Sales Data & Forecast 2022
In 2022, new-home sales are expected to plummet by 16%. Increased mortgage rates have forced many prospective purchasers to cancel contracts or postpone home purchases because they cannot afford the higher monthly payments. The increase in new-home inventories is assisting in slowing the price rise.
August housing starts, a measure of new home construction, jumped 12.2% from July, and were down 0.1% from a year ago, according to the US Census Bureau. After a big drop earlier this spring, housing starts had been holding relatively steady up until last month. This latest increase in new housing starts is a good thing for the housing market because inventory has been so tight.
The shortage in supply has played a big factor in pushing home prices higher amid soaring demand, part of why home prices were climbing. The majority of the increase in housing starts in August came from multifamily properties, which had five or more units and were up nearly 30% from July. Single-family starts increased modestly, up 3.4% from the previous month. There are still signs that the housing market is volatile, and builders are cautious. Building permits fell 10% in August compared to the revised July rate and 14.4% year on year.
New Home Sales Trend in 2022 [Previous Months]
Sales of new single-family homes in the United States fell 12.6% month over month in July 2022, to a seasonally adjusted annualized rate of 511K, the lowest figure since January 2016 and considerably below the forecast of 575K, due to increased borrowing rates, prices, and a drop in demand. New single-family home sales in the United States reached a 6-and-a-half-year low in July.
New home sales in the United States shrank 8.1% from a month earlier to a seasonally adjusted annual rate of 590,000 in June of 2022, well below market expectations of 660,000. It is the lowest reading since April of 2020, as the housing market is cooling as rising mortgage and material costs hurt affordability. Sales fell in the West (-36.7%), the Northeast (-5.3%), and the South (-2%) but rose in the Midwest (42.3%).
The median sales price of new houses sold declined for a second month running to $402,400 but was still way above $374,700 a year earlier. The median sale price was $402,400, 7.4% higher than in June of 2021. There are 457,000 houses to sell, corresponding to 9.3 months of supply in inventory, compared to 8.4 months in May.
New home sales in the United States rose 10.7% from a month earlier to a seasonally adjusted annual rate of 696,000 in May of 2022, above market expectations of 588,000. Sales rose in the West (39.3%) and in the South (12.8%) but declined in the Northeast (-51.1%) and in the Midwest (-18.3%).
Despite the rebound in May, elevated house prices and mortgage rates of near 6% are likely to continue to hit sales in the next months. Meanwhile, the median sales price of new houses sold last month was $449,000, up 15% from the previous year, and the average sales price was $511,400. There are now 7.7 months of supply in inventory, compared to 8.3 months in April.
New home sales data is published monthly by the US Bureau of Census. The units displayed are in thousands and are the seasonally adjusted annual rate. Here is the regional breakdown for new home sales in the United States for the previous months. New Residential Sales data provides statistics on the sales of new privately-owned single-family residential structures in the United States.