One month after surging to their highest level in nearly nine years, sales of new homes nationwide retreated in August, with the exception the west, the Commerce Department reported Monday.
Sales of newly built houses in the west jumped 8% from a month earlier, while nationwide sales dropped 7.6% to a seasonally adjusted annual rate of 609,000 units. That followed a surge in sales in July, when they jumped 13.8% to a rate of 659,000, the fastest pace since October 2007.
The median price of a new home sold in August was $284,000, down 3.1% from July and down 5.3% from a year earlier.
Sales had been expected to slow after the July surge; new home data can fluctuate widely from month to month because of a small sample size.
Overall, the new-home market is on the upswing, though sales aren’t back to historically normal levels, said Ralph B. McLaughlin, chief economist with real estate firm Trulia.
Sales per 1,000 U.S. households clocked in at just 4.6 in August, or 63.4% of the 50-year average, McLaughlin said.
“This comparison suggests homebuyers aren’t buying new homes at the rates older generations did,” he said in a statement.
Sales of existing homes also slipped 0.9% in August to an annual rate of 5.33 million units.
One problem weighing on the industry is a lack of inventory available for sale.
At the August sales pace, it would take 4.6 months to exhaust the supply of new homes on the market. That’s up from a 4.2-month supply in July but still below historic levels. Even though construction of new homes has accelerated for most of this year,. builders would like to boost construction even more, but they face rising costs for land and labor.
By region, sales fell the most in the Northeast, dropping 34.3%. Sales were down 12.3% in the South, and they fell 2.4% in the Midwest. The West was the only region of the country that saw a sales increase last month.
12:10 p.m.: This article was updated with comment from Trulia chief economist Ralph B. McLaughlin.
This article was originally published at 7:45 a.m.