Midwestern United States

The median price of a new home rose a record-breaking 11.2 percent in August, reaching $256,000. That marks the highest level since March 2007, the U.S. Census Bureau reported Wednesday.

The price of new homes in August soared 17 percent compared to last year at this time.

The number of new-homes that sold in higher price ranges — $400,000 or more — rose significantly in August.

“This reflects the fact that people who are able to buy homes right now are those in higher-income ranges who have cash and equity on hand, while first-time buyers are having a tougher time getting qualified for a mortgage,” says David Crowe, the National Association of Home Builders’ chief economist.

As prices rose, inventories of new homes in August remained at record lows. It would take 4.5 months to clear the houses on the market at August’s sales pace, the Census Bureau reported.

Single-family home sales mostly held steady in August, remaining at two-year highs. Sales slipped 0.3 percent to a seasonally adjusted annual rate of 373,000.

On a regional basis, new-home sales in August soared 20 percent in the Northeast, 1.8 percent in the Midwest, and 0.9 percent in the West. New-home sales declined 4.9 percent in the South in August.

“New-home sales in August effectively tied the pace they set in the previous month, when they were the strongest we’ve seen in more than two years — so this is really a continuation of the good news we’ve been getting on the housing front,” says Barry Rutenberg, NAHB chairman. “Looking at the big picture, sales have been trending gradually upward since the middle of last year as favorable interest rates and prices have driven more consumers to get back in the market for a newly built home.”

Source: “New Home Sales Ease, But Prices Hit 5-Year High,” Reuters (Sept. 26, 2012) and the National Association of Home Builders