The Census Bureau reported new home sales for August at a seasonally adjusted annual rate of 629,000 units. This was in line with expectations, but previous months were revised downward. The August numbers for new home sales indicated a month-over-month increase of 3.5% and a 12.7% increase above August of last year, a relatively easy comparison. Sales of new homes are up 6.9% year-to-date through August when compared to the same period last year.

The median price of a new home contracted in August was $320,200, down about $8,000 from last month, but higher than last year. The average price of a new home in August posted at $388,400, relatively flat compared to last month, but up sharply from last year. The supply of new homes stood at 6.1 months in August.

The Census counts a new home sale at the time of contract signing. This would be more like a pending sale when comparing it to the local MLS sales statistics. Pending sales of new homes for the month of August were up 13 percent in the Dallas-Fort Worth Area, about in line with today’s Census numbers. Denton County saw a 7 percent increase in pending home sales for August according to NTREIS trends data, and the City of Denton saw a 56 percent increase in pending sales of new homes compared to last year, helping to offset the sharp decline in resale activity last month.

As expected, the Federal Reserve hiked interest rates again today. This was the third rate hike this year, as the Fed raised their target range for the Fed Funds rate to 2 to 2.25 percent. Home price gains have been cooling of late, and yesterday’s S&P Case-Shiller index for July provided more confirmation of that. The MBA’s mortgage purchase application index is still showing a 4 percent increase in activity compared to the same time last year.

All things considered, the new home sales market is hanging in there, picking up some slack with the still low levels of resale inventory. The sixty thousand dollar question is whether builders can build enough affordable inventory to keep their volume levels from shrinking. The builders that are keeping their price points down this year, seem to be doing pretty well. Some builders are certainly faring better than others.

The yield on the 10-Year Treasury bond had been flirting with 3.10 this week. Interestingly the yield sank below 3.05 percent after the Fed’s rate hike today.