August New-Home Sales Hit Highest Since December Amid Strength in Midwest

02:01 PM EDT, 09/24/2026 (MT Newswires) -- US new-home sales last month reached the highest level since December, led by a surge in the Midwest, though Oxford Economics said rising mortgage rates will likely test the housing market ahead. Sales of new single-family homes rose 6.4% sequentially to a seasonally adjusted annual rate of 684,000 in August, the highest reading since December, data from the Census Bureau and the Department of Housing and Urban Development showed Thursday. Analysts polled by Bloomberg expected a 616,000 print. Sales jumped nearly 85% in the Midwest, while the South logged growth of 6.9%. The Northeast saw a 36% decline, while sales decreased 15% in the West, the data showed. "New home sales surprised for the upside in August, while the trend of upward revision to prior month data persisted," Oxford Economics Senior US Economist Matthew Martin said in remarks e-mailed to MT Newswires. "However, the renewed push higher in mortgage rates and the hit to real disposable income from elevated inflation will test the housing market and will push us to revise down our forecast for sales this year and next." On Wednesday, the Mortgage Bankers Association said mortgage applications in the US fell last week as the average interest rate for the key 30-year fixed mortgages with conforming loan balances of $832,750 or less reached 7.12%, the highest since May 2024. The median price for new houses sold edged 0.4% higher month on month to $393,700 in August, while the average sales price fell 9.1% to $478,700, official data showed Thursday. "Higher mortgage rates will only exacerbate affordability issues, meaning homebuilders will likely need to continue to offer price cuts to encourage sales -- further adding to the downside pressure to median new home sale prices," Martin said. Recently, homebuilder KB Home (KBH) cut its full-year housing gross profit margin estimates amid weaker market conditions and affordability pressures. Rival Lennar (LEN) reported weaker-than-expected fiscal third-quarter results as affordability challenges slowed home-buying activity. Price: 81.12, Change: -0.41, Percent Change: -0.50