New Home Sales, which measure signed contracts on new homes, fell 8.7% from July to August to a 675,000-unit annualized pace. However, there was a positive revision to the number of signed contracts in July, and sales are still higher than they were a year earlier. 

What’s the bottom line? Buyers continue to turn to the new construction market due to the lack of existing homes for sale. However, more “available” supply of new homes is needed to meet demand. Of the 436,000 new homes available for sale at the end of August, only 76,000 were completed, with 254,000 under construction and 106,000 not even started yet.

The tight supply of both existing and new homes will continue to be supportive of home prices. On that note, the median sales price for new homes was $430,300, which was down from $440,300 a year ago. While this may sound like home prices are declining, this figure is not the same as appreciation but represents the mid-price and can be skewed by the mix of sales among lower-priced and higher-priced homes.

Multiple appreciation reports have reported record high home price growth in their respective indexes, as detailed below.