ARLINGTON, Va.—New home sales rose 12.3% in September to 759,000 annualized units, while sales in August were revised up 1,000 units. Compared to last year, September’s sales were 33.9% higher, according to new data from the Census Bureau.
“Defying the steady climb in mortgage rates, new home sales rebounded 12.3% in September,” said NAFCU Research Analyst John Hay. “With high rates pricing many buyers out of the market, home builder sentiment fell for the third straight month in October, nearly reaching the January low point for the year. In order to boost sales, 32% of builders cut prices in September, and the October survey shows those dynamics have continued.”
The new Census Bureau data show that based on current month sales, there were 6.9 months of supply in September, up 0.8 months from August. The number of unsold homes left on the market increased 3,000 to 435,000. This represents a 5.4% decline from inventory levels a year ago.
Regional Performance
Regionally, sales increased in the Northeast (22.5%) followed by the South (14.6%), the West (7.5%), and the Midwest (4.7%), the Census Bureau said.
Of note, the median new home price, non-seasonally adjusted, fell 3.3% to $418,800 – 12.3% lower than a year earlier, Hay said.
“As builder margins narrow, supply is poised to follow,” Hay stated. “While housing starts in September were up 7%, starts are still 7.2% lower than a year ago, and the number of permits authorized in September declined by 4.4%. Nevertheless, demand has proven remarkably resilient, all things considered. NAFCU expects home sales to remain anchored near their present level until rates decline.”
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