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30 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION the latest new Home sales surge as existing Home deals decline slightly Transactions on new homes reach levels not seen since 2008. t he pace of new single- family home sales in August outperformed even the most optimis- tic projections, climbing to a near six-year high, according to recent government numbers. The Commerce Department re- ported new home sales in August were up 18 percent month-over- month to a seasonally adjusted annual rate of 504,000. Compared to August 2013, estimated sales were up 33 percent. Economists projected a consen- sus sales pace of 430,000, which would have been a slight increase over July's upwardly revised figure of 427,000. Forecasts ranged from a low of 407,000 to a high of 465,000—still nearly 40,000 short of the government's estimate. While the early numbers look promising, there's been a great amount of swing between prelim- inary estimates and revised sales figures throughout the year—as demonstrated just a few months ago, when an originally reported 18.6-percent jump in new sales for May was cut down to just 8.3 percent in a later fix. Still, August's jump is sure to come as welcome news to home- builders, who have expressed increasing confidence in new single-family housing even as the market has staggered forward. In a report issued in recent weeks, the National Association of Home Builders (NAHB) revealed its measure of builder sentiment was up to a nine-year high in the latest reading, with perceptions of both current and future sales conditions improving. "Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction," said NAHB Chairman Kevin Kelly at the time. The median sales price of new homes sold in August was $275,600, down from more than $280,000 in July. The average sales price was $347,900, up from $345,000. Seasonally adjusted estimates indicate the stock of new houses for sale at the end of the month was 203,000, translating into a 4.8 months' supply at the current sales rate. Meanwhile, sales of existing homes fell in August to their second highest pace this year as investors pulled back from the market. According to transaction data from the National Association of Realtors (NAR), existing- home sales that month were at a seasonally adjusted annual rate of 5.05 million, a decrease of 1.8 percent from July's sales pace of 5.14 million and a drop of 5.3 percent compared to last year. A consensus forecast from economists called for a slight month-over-month pickup in sales to a rate of 5.18 million. The group's chief economist, Lawrence Yun, pinned August's slower pace to a decline in all- cash purchases made by investors. According to NAR, all-cash sales represented 23 percent of August transactions, marking the lowest share since December 2009. "On the positive side, first- time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have signifi- cantly eased in many parts of the country," Yun said. "As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying." According to NAR's data, the share of first-time homebuyers in August remained unchanged from July at 29 percent. Regionally, existing-home sales moved up in the Northeast and Midwest, climbing 4.7 percent and 2.5 percent from July, respectively. The usually more active South and West regions both posted declines, with sales falling 4.2 per- cent and 5.1 percent, respectively. Year-over-year, sales were down in all regions. Looking only at single-family transactions, the association reported home sales fell 1.8 percent to an adjusted rate of 4.46 million, putting sales nearly 5 percent short of where they were a year ago. Including all housing types, the median existing-home price in August was $219,800, an increase of 4.8 percent over August 2013. It was the 30th straight month of annual price gains, NAR reported.