New Home Sales Soared In August, Prices Plunged As Mortgage Rates Spiked

With homebuilder confidence plumbing new depths (and Housing Starts and Permits plunging), expectations were surprisingly for a small bounce back in new home sales in August (after collapsing in July).

Analyst consensus was correct, with a 6.4% MoM jump (+1.3% MoM exp) with July's 10.5% MoM plunged revised dramatically higher to just 4.3% MoM decline. August was the biggest surge in sales since February, but still left sales down 2.0% YoY...

Total new home sales SAAR jumped to 864k - its highest level of 2026...

Median new home prices tumbled, down 5.8% from a year ago to $393,700....

Additionally, average new home sales price plunged almost $50K to $478,700, lowest since since August 2024...

This was the biggest monthly drop in average new home prices on record!

Interestingly, the supply of new homes for sales continues to tread water along with homes under construction. A trend that has been clear all year...

And finally, here's a weird one - as mortgage rates have soared (now back above 7.00%), so sales have also soared?

So did homebuilders finally slash prices as the final 'incentive' to restart sales? Or was this a last minute rush into homes ahead of rate-hikes and soaring mortgage rates?