ARLINGTON, Va.—New home sales fell 5.6% in October to 679,000 annualized units, while sales in September were revised down 40,000 units. Compared to last year, October’s sales were 16.7% higher, according to new data from the Commerce Department.
“New home sales dipped in October but remained in line with the sales trend over the past six months,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Homebuilder sentiment fell for the third consecutive month in October and has since dropped again in November. In response to market pessimism, the rate of home builders offering price cuts increased from 32% in October to 36% in November.”
Based on current month sales, there were 7.8 months of supply of new homes in October, up 0.6 months from September. The number of unsold homes left on the market increased 6,000 to 439,000. This represents a 5.8% decline from inventory levels a year ago.
Sales of New Homes by Region
For new homes regionally, sales increased in the Northeast (13.2%) and in the South (2.1%). Sales fell in the West (-23.3%) followed by the Midwest (-16.4%), Long said.
Of note, the median new home price, non-seasonally adjusted, fell 3.1% to $409,300 – 17.6% lower than a year earlier.
“New construction data is showing marginal improvement. The labor market is solid and demand remains resilient. NAFCU expects new home sales to show incremental gains as rates decline,” stated Long.
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