US New Home Sales Decline 4.7% in August

New U.S. single-family home sales fell 4.7% in August to a seasonally adjusted annual rate of 716,000 units, although this figure represents a 9.8% increase year-on-year. The decline occurred despite lower mortgage rates, which averaged 6.09%, the lowest since February 2023, following a recent 50 basis point cut by the Federal Reserve. The median new home price also decreased by 4.6% to $420,600 compared to the previous year. Builders are offering more incentives to attract buyers facing affordability challenges, as the inventory of existing homes increases. While lower rates may bring more buyers into the market, affordability constraints could temper demand for new homes. The mixed signals from the housing market reflect ongoing economic uncertainties and changing buyer preferences.