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!

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?