We have more good news/bad news from the housing market.  Sales of new single-family homes hit a six-month low in August, according to the Departments of Commerce and HUD today, falling 2.3% from July.  But this dark cloud has a long-awaited silver lining:

Sales of new single-family houses in August 2011 were at a seasonally adjusted annual rate of 295,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 2.3 percent (±13.9%)* below the revised July rate of 302,000, but is 6.1 percent (±18.8%)* above the August 2010 estimate of 278,000.

The median sales price of new houses sold in August 2011 was $209,100; the average sales price was $246,000.  The seasonally adjusted estimate of new houses for sale at the end of August was 162,000.  This represents a supply of 6.6 months at the current sales rate.

The bolded part is the silver lining.  Thanks to a sharp drop in construction activity over the last two years, we have finally begun to approach a rational inventory level in new single-family homes.  That is the lowest inventory level in years, and is a sign that the market may be approaching its bottom.

For once, Reuters accurately predicted the output — which readers here might consider unexpected:

New single-family home sales in the United States fell in August to a 6-month low but the supply of homes available on the market dropped to a record low. …

Economists polled by Reuters had forecast a 295,000-unit rate in August.

The silver lining isn’t exactly a signal of a boom, however.  Thanks to the long-delayed resolution of foreclosures from 2008-9, the resale market will face a glut of cheap inventory over the next year or so.  That’s been expected for a long time, and it shouldn’t shock the markets, but it will put some extra downward pressure on resale prices, and that will attract buyers who might otherwise have interest in new builds.

Until resale and foreclosure inventories approach normal levels, there still won’t be much profit in new construction.  And the inventories won’t move until we produce more qualified buyers through job creation, and that cycle appears to be at least several months from beginning.  Don’t expect to see any significant expansion in new-home construction until next year.  However, after probing for almost three years for a floor in the housing market, we may be finally seeing it.