Sales of new single-family homes declined month over month in August but nevertheless topped Wall Street expectations.

Specifically, August’s seasonally adjusted annual rate of 716,000 represented a 4.7% decline from July’s upwardly revised rate of 751,000, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Year over year, sales were up 9.8% from 652,000.  

August’s figure topped the consensus estimate of 700,000, and the new-home market offers a bright spot in the overall housing picture, First American Financial Deputy Chief Economist Odeta Kushi noted.  

“The long-term housing shortage, lower mortgage rates and builders’ ability to offer incentives will help to buoy new single-family sales,” Kushi said in a statement. “However, builders continue to grapple with challenges stemming from the ‘Five Ls’: labor, lots, legal issues, lumber and lending.  

“Despite the challenges, the new-home market will likely continue to outperform the existing-home market over the near term because, unlike existing homeowners, builders are not rate locked-in.” 

The median price of a new home sold during August slid to $420,600, compared to $429,000 in July. Year over year, the median price was down from $440,900 in August 2023.       

Months’ supply of new homes for sale grew from 7.1 months in July to 8.2 months in August. Year over year, months’ supply was down from 8.4 months.