New home sales in August totaled 609k annualized, slightly above the forecast of 600k and July was revised up by 5k to 659k, the best in this recovery. The biggest volatility was seen down South. After an almost 60k home spike in the South in July, they fell back by almost 50k. Overall months’ supply was 4.6, up from 4.2 in July but vs 5.0 in June. The median home price fell 5.4% y/o/y to $284,000, the lowest since 2014 but part of this was in the mix as homes for sale priced below $500k fell more than the top end. The key area of the market that needs more homes, those priced below $200k, saw a sales decline. If the market is going to draw more first time households away from renting, this is the price point that must do it.
Bottom line, the recovery in housing continues its upward trajectory as the m/o/m drop in August comes off a large jump in July and is still the 2nd best print since the bubble popped. This said, we are still at a run rate that is below the 25 year average of 715k. Forget about approaching the peak as that was almost 1.4mm in July 2005.
On one hand, the current pace of sales points to much catch up to be done. On the other, we see the unfortunate aftermath of a massive bubble. As for all the housing data out over the past week, they were mixed but again, still pointing to a recovery… however uneven.