Builders slash prices and add incentives, U.S. new home sales unexpectedly soar in August.

In August, new home sales in the United States unexpectedly soared to the fastest pace since the beginning of 2022, possibly benefiting from builders heavily discounting prices and sales incentives being taken in a tight economic environment. A government report released on Wednesday showed a seasonally adjusted annual rate of 20.5% for new home sales, reaching a total of 800,000 units, well exceeding expectations. The sharp increase in demand has greatly alleviated the situation of oversupply of new homes in the market. Last month, the inventory of new homes for sale dropped to 490,000 units, the lowest level this year. Data shows that US home builders are successfully attracting buyers through aggressive sales incentives. A survey conducted this month by the National Association of Home Builders and Wells Fargo Bank showed that 39% of builders reported price cuts, reaching a new high since the pandemic. Analyst Drew Reading said that home builder Lennar Corporation recently announced that the sales incentives they offer are equivalent to 14.3% of their average selling price, more than double the usual 5% or 6%.