ARLINGTON, Va.—New home sales declined 8.9% in October to the lowest level since March 2016.
"Housing demand is being supported by a strong labor market and improving rates of household formation. But in spite of those tailwinds, demand has waned in recent months as affordability deteriorates with rising mortgage rates," said NAFCU Research Assistant Yun Cohen.
October's new-home sales were 12% lower than a year ago. Sales in the Midwest slumped by 22.1% during the month, followed by the Northeast (-18.5%), the South (-7.7%) and the West (-3.2%).
Based on current-month sales, there were 7.4 months of supply in October, up from 6.5 months in September. The number of unsold homes left on the market rose from 322,000 to 336,000 units. This marks the highest inventory level since 2009 and represents a 17.5% increase from a year ago, Cohen said.
The median new home price, non-seasonally adjusted, decreased from $321,300 in September to $309,700 in October. October’s prices were 3.1% lower than a year ago, Cohen noted.