US new home sales fall in August; median house price drops

SALES of new US single-family homes fell in August, but declining mortgage rates and house prices could stimulate demand in the months ahead.

New home sales dropped 4.7 per cent to a seasonally adjusted annual rate of 716,00 units last month, the Commerce Department’s Census Bureau said on Wednesday (Sep 25). The sales pace for July was revised higher to 751,000 units from a previously reported 739,000 units.

Economists polled by Reuters had forecast new home sales, which account for more than 10 per cent of US home sales, falling to a rate of 700,000 units. New home sales are counted at the signing of a contract. They, however, can be volatile on a month-to-month basis. Sales rose 9.8 per cent on a year-on-year basis in August.

The average rate on the popular 30-year fixed-rate mortgage dropped to 6.09 per cent last week, the lowest since February 2023, from 6.20 per cent in the prior week, data from mortgage finance agency Freddie Mac showed.

The Fed last week cut its benchmark overnight interest rate by 50 basis points to the 4.75 to 5 per cent range.

The median new house price decreased 4.6 per cent to US$420,600 in August from a year ago. REUTERS