New-home sales in the U.S. rose slightly in August from the previous month but still trail even the dismal pace of last year.
Sales of new homes inched up 0.7% from July to a seasonally adjusted annual rate of 429,000 units, the Census Bureau reported Friday.
August’s sales pace was 4.3% below the same month a year earlier. Last year ended with 485,000 new homes sold, the worst year for new-home sales since 1982 and the third-worst year since the federal government began tracking the data in 1963. New-home sales peaked in 2005 at 1.23 million units.
New-home sales were up 12% in the West over July but down 16% in the Northeast and down 6% in the Midwest; they were unchanged in the South from July to August.
Builders have slashed prices to clear their vast inventories of unsold homes. The new-home median sale price last month was $195,200, down 12% from $221,900 in the same month in 2008.
Fifty-one percent of new homes sold in August cost less than $200,000, up from 46% in July.
Builders also have scaled back construction dramatically, cutting the inventory of new homes to a 7.3-month supply, down 34% from 11.1 months a year earlier. The reduction marks a return to a more normal market: a roughly six-month supply is the historical norm.
As the new-home market struggles to find a bottom, KB Home, one of the nation’s largest builders, said its revenue for the three months ended Aug. 31 fell 33% to $458.5 million from $681.6 million in the year-earlier period.
The Los Angeles company lost $66 million, or 87 cents a share, in the third quarter. The loss was smaller than the company’s loss of $144.7 million, or $1.87 a share, in the same period last year, but worse than analysts had projected.
Analysts polled by Thomson Reuters were expecting a loss of 58 cents a share on revenue of about $457.9 million.
KB Home Chief Executive Jeffrey Mezger said in a conference call with analysts that “the precise timing of a market recovery remains uncertain,” and that foreclosures and unemployment are the industry’s chief challenges.
“It’s difficult for the housing sector to build momentum as long as potential home buyers lack job security,” he said.