Sales of new U.S. homes fall
WASHINGTON — Sales of new U.S. homes slumped 3.4 percent in August, the second straight monthly decline.
The Commerce Department said Tuesday that sales dropped to a seasonally adjusted annual rate of 560,000. This followed a 5.5 percent decline in July. Still, sales gains earlier this year mean that sales are running 7.5 percent higher year-to-date than in 2016.
Sales could worsen in coming months as parts of Texas and Florida — hit by hurricanes Harvey and Irma — find that new construction gets delayed as the focus turns to rebuilding properties that were flooded or damaged by the fierce winds and rainstorms.
But August’s drop in new-home sales also points to the limits of the rebound from the Great Recession and the housing bust that triggered the downturn a decade ago. Home values have climbed at a much faster pace than incomes, meaning that many buyers had to strain their budgets to purchase houses. Low mortgage rates reduced the financial crunch somewhat, but then sales listings began to dwindle, and many wouldbe buyers have found themselves outbid on existing homes and priced out of new housing developments.
A shortage of homes for sale coupled with rising prices has turned affordability into a challenge for many would-be buyers. Fewer new homes priced below $200,000 are coming onto the market. New homes at these relatively affordable prices were 14 percent of sales in August, down from 17 percent in 2016 and 19 percent in 2015.
The median sales price increased 3.7 percent in the past 12 months to $368,100.
On Wall Street Tuesday, stock indexes finished mixed after a late slump erased most of an early gain. Technology companies recovered some of the losses they took a day earlier, but energy companies and banks slipped.