U.S. new home sales rebound in August after declining in July

Washington [US], September 28: Sales of new houses in the United States in August rebounded after falling in the previous month, the U.S. Census Bureau reported Tuesday.
Sales of new single-family houses in August were at a seasonally adjusted annual rate of 685,000, which was 28.8 percent above the revised July rate.
The latest figure was still 0.1 percent below the August 2021 estimate, according to the report.
"Mortgage rates trended lower in the second half of July and first weeks of August, which likely spurred buyers to move forward with a purchase," Charlie Dougherty and Patrick Barley, economists at the Wells Fargo Securities, wrote in an analysis.
"The upside surprise is also a reminder that underlying home buying demand remains strong and worsening affordability is the major factor holding back prospective buyers," they noted.
The Census Bureau report also showed that the median sales price of new houses sold in August was 436,800 U.S. dollars, and the average sales price was 521,800 dollars.
A steep rise in mortgage rates, which resulted from aggressive actions by the U.S. Federal Reserve, and inflation together have caused housing demand to drop in recent months.
The Federal Reserve has enacted five rate hikes since March to tackle surging inflation, taking its benchmark rate to a range of 3 to 3.25 percent, and signaling a more hawkish path ahead.
In another report released by the U.S. Census Bureau last week, new construction of U.S. homes also rebounded in August after falling in the previous month, but building permits saw a steep decline.
The report showed that privately-owned housing starts in August were 12.2 percent above the revised July figure but 0.1 percent below the August 2021 rate.
"Mortgage rates have spiked back up and are currently close to 7 percent, however," Dougherty and Barley noted. "The move higher threatens to significantly reduce home buying activity in the months ahead."
Source: Xinhua