Sales of new homes fall slightly in August

Sales of new homes fell in August while prices took a big jump in August, as the housing market continues showing signs of stabilizing. 

Sales edged down slightly to a seasonally adjusted annual rate of 373,000 in August, down 0.3 percent from July's revised rate of 374,000, which was the fastest pace in more than two years, the Commerce and Housing and Urban Development departments reported Wednesday. 

"So this is really a continuation of the good news we've been getting on the housing front," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB). 

"Looking at the big picture, sales have been trending gradually upward since the middle of last year as favorable interest rates and prices have driven more consumers to get back in the market for a newly built home."

New-home sales are 27.7 percent above last year's pace of 292,000. Still, the figure is well below the 700,000 that signals a healthy market. 

Home builders expect the sales in the third quarter to run well ahead of even the April-June quarter this year, said NAHB Chief Economist David Crowe. 

Meanwhile the median sales price posted its largest monthly gain on record, jumping 11.2 percent to $256,900, likely boosted by sales of higher-priced properties, pushing it up to the highest price since March 2007. 

Compared with a year ago, the median price is up 17 percent. 

The share of new homes sold in the higher price ranges ($400,000 and above) rose significantly in August, Crowe said.  

"This reflects the fact that people who are able to buy homes right now are those in higher-income ranges who have cash and equity on hand, while first-time buyers are having a tougher time getting qualified for a mortgage," he said.

The seasonally adjusted estimate of new houses for sale at the end of August was 141,000, which represents a supply of 4.5 months at the current sales rate.

"The razor-thin inventory of new homes for sale is very concerning because it indicates that builders aren't able to access the credit they need to build new homes as demand for them improves," Crowe said. 

The Northeast posted the largest sales gain, up 20 percent, while sales increased 1.8 percent in the Midwest and 0.9 percent in the West. 

Sales fell by 4.9 percent in the South.