Robert Dietz, chief economist for the National Association of Home Builders (NAHB), Washington, DC, said in the Oct. 2 edition of NAHB’s Eye on the Economy e-mail newsletter that if want evidence the housing market was a bright spot for the U.S, economy, look no further than August’s home sales data, which hit the highest level since 2006.
Dietz said single-family new home sales climbed +4.8% to a 1.01 million seasonally adjusted annual rate, and that the August sales rate marks a +43% gain compared to August 2019 and leaves year-to-date new home sales +15% higher for 2020 compared to 2019.
“The accelerated sales pace combined with a -40% year-over-year decline in new inventory has resulted in a very lean 3.3-month supply,” he said. “Moreover, sales of homes that have not yet started construction are up +69% compared to a year ago. And it’s not just new home sales that are surging. Existing home sales reached a 14-year high in August. Total resales increased by +2.4% from the prior month, and were +10.5% higher than a year ago despite inventory remaining tight at just a three-month supply.”
NAHB’s Dietz also said the lack of inventory for both new and existing homes points to solid levels of single-family construction in the months ahead. Single-family starts were up +4% in August, rising to a 1.02 million rate, and are now +3.8% higher on a year-to-date basis. Another reason to cheer — builder confidence, as measured by the NAHB/Wells Fargo Housing Market Index, is at an all-time high of 83.