New home sales fell in August from the previous month as prospective homebuyers wait for further declines in mortgage rates.
New home sales in August were a seasonally adjusted 716,000, down 4.7% from a revised 751,000 in July, according to Census Bureau data released Wednesday. Year-over-year sales were up 9.8% from last August and beat Bloomberg consensus expectations of a pace of 700,000.
Still, the monthly slowdown in sales activity reflects the continued deterrence of buyers for new homes as rising mortgage rates, record home prices and limited inventory continue to dampen buyer enthusiasm for new homes.
Mortgage rates remain high but have fallen since May in anticipation of a Fed rate cut. The average rate on a 30-year fixed mortgage was 6.09% last week.
The Federal Reserve cut interest rates by half a percentage point last week and forecast two more cuts this year and four more in 2025.
Many homebuilders are making terms more favorable for homebuyers who are struggling to afford a home. Lennar (LEN), for example, said in its third-quarter earnings call last week that “lower interest rates and incentives have helped drive demand to access the market in the past.”
New home sales fell 4.7% to a seasonally adjusted 716,000 in August from a revised 751,000 in July, according to data released Wednesday by the Census Bureau. (Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images)
Applications to buy a home rose 1% last week, according to data released Wednesday by the Mortgage Bankers Association.
Meanwhile, homebuilders are planning more projects as lower borrowing costs are expected, and housing starts rebounded in August. Separate Census Bureau data showed new home construction rose 9.6% year-over-year to 1.36 million last month, the fastest growth since April.
Dani Romero is a reporter for Yahoo Finance. Follow her on X Dani Romero TV.
Click here for the latest economic news and indicators to help inform your investment decisions.
Read the latest financial and business news from Yahoo Finance