ARLINGTON, Va.—New home sales increased 7.5% in October to 632,000 annualized units, while sales in September were revised down 15,000 units. Compared to last year, October sales were down 5.8%, according to new data.
“The average 30-year mortgage rate in October averaged 6.9%, up 0.8 percentage points from September, and causing potential homebuyers to back out of deals at an increasing rate,” said Long. “Over 25% of contracts were cancelled in October according to the homebuilder survey by John Burns Real Estate Consulting."
Based on current month sales, there were 8.9 months of supply in October – a 0.5 month decrease from September. The number of unsold homes left on the market increased by 7,000 homes to 470,000, a 21.5% increase from inventory levels a year ago, the data reveal.
New home sales were mixed in the Census regions in October. The Northeast saw the largest increase with a 59.4% jump in sales, followed by the South (+16%). In the Midwest, sales fell 34.2% followed by the West (-0.8%).
Downward Revision Expected
“Census data does not capture cancellations in their estimates, so NAFCU expects to see October's estimate revised down,” Long said. “The National Association of Home Builders/Wells Fargo Housing Market Index found builder sentiment declined for the 11th straight month in October."
Of note, the median new home price, non-seasonally adjusted, went up 8.2% in October to $493,000, amounting to 15.4% higher than a year earlier.
“New housing permits are down 2.4% from September and are down 10.1% from a year ago,” concluded Long. “Although completed new homes are rising due to unwinding supply chain snags, that trend should fade as the pipeline matures. NAFCU expects the housing market to remain depressed through at least mid-2023.”
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