A minor decline in mortgage rates resulted in a surprise big increase in new house sales in August, however this figure may be revised down in the next month.
Sales of newly built single-family houses increased 20.5% in August to a seasonally adjusted annual rate of 800,000, up from an upwardly revised estimate in July, according to newly released statistics from the United States Department of Housing and Urban Development and the United States Census Bureau. New house sales are 15.4% higher than a year ago.
The three-month moving average of new home sales rose from 656,000 in July to 713,000.
However, the Census Bureau’s estimate of new house sales is sometimes fluctuating from month to month and vulnerable to considerable changes.
Despite the sharp monthly increase in predicted August sales, the NAHB anticipates a gradual increase in new home sales, aided by a recent interest rate drop and a downward trend in mortgage rates. As a result, the August Census reading may be revised downward in the next month’s reporting.
A new home sale occurs when a sales contract is signed or a deposit is received. The home can be at any stage of building: not yet started, under construction, or finished.
In addition to compensating for seasonal factors, the August reading of 800,000 units represents the number of homes that would sell if this rate persisted for the next year.
In August, new single-family house inventory fell for the third consecutive month to 490,000 units listed for sale (at all stages of construction).
This is 1.4% lower than last month and 4.0% greater than a year ago. At the current sales pace, the months’ supply of new homes was 7.4, down from 8.2 the previous year.
The decrease in inventories reflects a recent slowdown in home construction activity.
A year ago, there were 104,000 completed, ready-to-occupy homes on the market. By the end of August 2025, that figure had risen by 18.3% to 123,000.
However, completed, ready-to-occupy inventory still accounts for only 25% of overall inventory, with homes under construction accounting for 53%.
The remaining 21% of new homes for sale in August were those that had not begun building when the sales contract was signed.
The typical sale price of new homes jumped to $413,500 in August, up 1.9% from the previous year. In August, 20% of new homes were priced below $300,000, with 31% priced above $500,000.
Notably, the proportion of new homes priced under $300,000 has reached its highest level in the last 11 months.
New house sales in the Northeast are down 22.0% year to date, 3.9% in the Midwest, and 7.3% in the West. The South has seen a 3.3% increase in new home sales.
[Read more about this topic on Eyeonhousing.org]