Summary The Census Bureau noted that new home sales in August came in at a seasonally adjusted annual rate of 552,000, which was far above the consensus estimate of 515,000. The low supply in new homes is a constraint to sales as compared to pricing, which still remains favorable at a median price of $292,700. The South, which is the largest region for new home sales, greatly outpaced the rest of the U.S., and on an annual basis, sales there increased by a whopping 28%. Housing activity is on a roll, and is expected to give a sizable boost to third-quarter growth. New home sales data can be quite volatile on a month-to-month basis, since the sample size is rather small. That said, the Census Bureau noted that new home sales in August came in at a seasonally adjusted annual rate of 552,000, which was far above the consensus estimate of 515,000. This is notably the highest annual rate since February 2008, and between July and June, there were upward revisions of about 15,000 units. From the chart below, you can see how the growth pace has more than corrected itself from the end of 2014. Ultimately, this news is especially helpful for homebuilders, as the strength in sales helped to pull down the supply-to-sales ratio even lower, to 4.7 months from 4.9 months. Nevertheless, the low supply in new homes is a constraint to sales as compared to pricing, which still remains favorable at a median price of $292,700. This equates to a 0.5% gain in the average new home price for the month, but is still a pretty sad 0.3% gain over the same month a year ago. By contrast, the year-over-year gain in new home sales has jumped by a whopping 22.0% - that's a lot of extra profit homebuilders are missing out on. On a regional basis, August data was particularly strong for the Northeastern US, but more importantly, the South, which is the largest region for new home sales, greatly outpaced the rest of the country. On an annual basis, sales in the South increased by a whopping 28.0%. Trailing all the regions is the West; however, sales growth there was still strong at an annual change of 11.0%. The chart below shows the regional changes in sales on a monthly basis. Aside from monthly volatility, this report in new home sales is rather impressive and should boost the optimism for housing data going into the autumn. This report, coupled with the report on existing home sales, points to limited, yet uneven, strength for the housing sector. Shares of the SPDR Homebuilders ETF (NYSEARCA:XHB) still lack a long-term catalyst to reach 52-week highs and beyond, but this report can be added to the arsenal of data that will bring the housing sector back to pre-recession levels. More