New US home sales held up pretty well in August, data out Wednesday showed, even as expectations for lower rates and a hangover from July’s big increase meant the pace slowed.

Economists expected to hear that sales of newly-constructed self-storage units for people (hat tip again to a reader for that oh-so-apt characterization of new-builds) fell 6% from the prior month. Instead, they dropped just 4.7%.

The annual pace, 716,000, was among the best in years despite the month-to-month decline.

Figures for May, June and July were all revised higher. Recall that July’s 10% gain was the largest since August of 2022.

The data, which is volatile, comes at pivotal juncture for US housing. Mortgage rates just fell an eighth week and refi activity’s starting to pick up. But buyers are reluctant and appear to be waiting it out, hoping for even more relief on the financing side to help ease the burden from record-high prices.

Builder sentiment remains very subdued, and in that context I’d be remiss not mention KB Home on Wednesday. The shares were under meaningful pressure after the builder missed on a handful of key metrics with results released after the bell on September 24.

Remember: There’s actually a glut of new construction in America. In stark contrast to the situation that (still) prevails on the resale side of the market, builders are saddled with the largest inventory overhang since the subprime bust.

With that in mind, Wednesday’s figures showed completed home sales registered the highest in nearly two decades (grey shaded area in the figure).

Notwithstanding the robust sales pace, builders have around half a million houses left to sell. 467,000 homes (the blue line in the figure above) is a lot, particularly when they cost, on average, $493,000.

That said (and partly because of that), the median new home price in August was “just” $420,600. That was down 4.6% YoY, the largest 12-month drop since October, when the market was reeling from mortgage rates approaching 8%. When you’ve got a lot to sell, you gotta discount it if you want to move it. Or in this case, move people into it.

Note from the figure that new home prices have notched seven straight YoY declines, and eight in nine.

There again we see the glaring discrepancy between the dynamics in the resale market and new construction.

Last week’s NAR figures showed the median existing home went for $416,700 in August. So, there’s no discount to speak of for buying “used.”

Indeed, existing home prices have posted annual gains for 14 consecutive months. Sales of “used” abodes declined in August and in 24 of the preceding 32 months besides.