While single-family home sales increased in August, experts are expecting the long-range trend of the market softening to continue.
The U.S. Department of Commerce's data show that new-home sales grew 3.5 percent annually in August, after declines in both June and July 2018. Andres Carbacho-Burgos, a senior economist at Moody’s Analytics, tells Reuters, “Despite the August increase, sales are still on a downward trend after peaking in November of last year." Overall, economists blame unaffordability as credit is tight, rates are rising, and home price growth is outpacing wage growth.
Sales in June were also much weaker than previously reported. Economists polled by Reuters had forecast new home sales, which account for about 11 percent of housing market sales, rising 0.5 percent to a pace of 630,000 units in August ... While economists expect small gains in new homes sales in the coming months, they believe the overall housing market has likely peaked. The housing market is lagging a robust economy, with data last week showing sales of previously owned homes flat in August and building permits hitting a more than one-year low.
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