The trend for the market capitalization of the U.S. new home market continued to benefit from the "golden handcuffs" problem afflicting the owners of existing homes in August 2023.

That assessment is comes despite the initial estimate of new home sales falling to 54,000 in August 2023 from a revised estimate of 61,000 new homes sold in July 2023. The mean sale price of new homes sold rose to an initial estimate of $514,000 in August 2023, up from July 2023's revised estimate of $507,900.

When we do the market cap math, multipling the mean sale price of new homes by their number of sales, we find the raw market capitalization of the U.S. new home market dropped from $30.98 billion to an initial estimate of $27.76 billion from July to August 2023. However, that dip was not sufficient to break what has been an upward trend for the new home market cap since November 2022.

Taken as the time-shifted, partially complete rolling twelve month average of the raw total value of new home sales, we find August 2023 registered the highest market cap since December 2020, with an initial estimate of $30.28 billion. That figure tops the finalized estimate of $30.12 billion recorded in December 2020. Here is the latest update to our chart illustrating the market capitalization of the U.S. new home market since January 1976:

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The next two charts show the latest changes in the trends for new home sales and prices:

New home sales trend still rising:

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New home prices slowly trending down:

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The trends through December 2022 in these charts are now fully finalized outside of any major revisions the Census Bureau may release at a future date. December 2022 saw the first uptick in the new home market cap, rising to $26.69 billion after having bottomed at $26.45 billion in the preceding month.

We'll review the affordability of new homes sometime next week, which will include the downward revisions in our estimates of median household income from March 2021 through July 2023, in addition to presenting the initial new home affordability estimate for August 2023.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 26 September 2023. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 26 September 2023. 

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