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Home resales slumped in the United States in late summer while new home starts saw a revival in August, two new reports from TD have found.
TD Economics published in September insights regarding home resales in the U.S. from August, finding sales fell 2.5 per cent month over month, and 4.2 per cent year over year.
At the same time, inventory grew less than one per cent from July in August, and up nearly 23 per cent from a year earlier.
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All told, supply in the U.S. resale real estate market grew to nearly four months, up three months one year ago.
Meanwhile, new home starts rose nearly 10 per cent in August from July driven by single-family detached homes activity. The housing type saw a nearly 16 per cent increase in starts month over month, while multi-family starts declined about three per cent.
The activity could be pared back in September, the report noted, given homebuilder “sentiment remained subdued.”
Yet the prospect of lower borrowing costs for mortgages as the Federal Reserve announced a 50-basis point cut to its interest rate — with more expected — buoyed expectations for sales.
Similarly, the report on resales suggests that higher inventories with decreased mortgage rates in the coming months will provide a backdrop “to help unlock more sales activity in the coming months.”
Still, TD Economics added that a cooling job market could pose a headwind for home sales growth, leading to a prediction that, in the near-term, sales may be sluggish.
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