New home sales dropped slightly in August, indicating that the nationwide housing market may begin to slow down during the coming fall and winter months.
According to the new home sales August 2017 report released by the U.S. Census Bureau, new home sales dropped by 3.4 percent since July 2017, and sales are down about 1.2 percent from this same time last year.
The dip in new residential home sales is nothing to be alarmed about, as this is likely indicative of a seasonal trend that takes place each year.
The 2017 summer selling season broke records in a variety of markets, and a drop in home builder sales can likely be attributed to the low inventory levels that are plaguing the nationwide housing market.
Additionally, the real estate market has a tendency to fizzle during the fall and winter, as families are focusing more on the back-to-school routine and on settling in for the remainder of the year.
New Home Sales August 2017: Facts and Figures
- About 560,000 homes were sold in August 2017 across the country, representing a 3.4 percent drop from July 2017.
- Nearly 284,000 homes were listed for sale in August 2017. Inventory levels have been dangerously low across much of the country, driving up both competition and home prices in the hottest markets. At the current sales rate, this figure represents a supply of just more than six months.
- The median sales price of homes for sale in August 2017 was $300,200.
While the slight drop in sales is likely largely due to seasonal trends and lower inventory levels, it can’t be ignored that two major markets in the country were impacted by severe natural disasters at the end of the summer.
Houston and the surrounding regions in Texas were devastated by Hurricane Harvey, which made landfall at the end of August and brought with it torrential flooding that destroyed many homes.
In addition, as August came to a close, Florida began to prepare for Hurricane Irma which also brought with it the threat of flooding and high winds that resulted in property damage.
According to the U.S. Census Bureau, there is no data specifically available for the regions impacted by Hurricane Harvey and Hurricane Irma. This is because the data is collected by the Survey of Construction, which creates national estimates for the real estate market versus state and local estimates.
Considering the fact that both of these storms hit at the end of August and the very beginning of September, it’s unlikely that the new homes sales August 2017 report was significantly affected.
Experts say, the September 2017 data will reveal the full scope of the impact that these storms had on the national real estate market.
While the August 2017 new residential homes sales data reflects the ebbs and flows of the national real estate market, it’s important for financial investors, real estate agents and building developers to recognize that home sales have generally been on the increase for the last five years.
The housing market is still rebounding and growing from the recession that took place about a decade ago, and real estate insiders and experts still feel quite confident in the nationwide market. It is anticipated that the market will continue to expand and that sales will continue to increase across the country.
The U.S. Census Bureau releases monthly data regarding new residential home sales, and the September 2017 new home sales report is due out at the end of October.