New Home Sales Up, But Previous Months Revise Down

New home sales rose in September, HUD and the Census Bureau reported yesterday. But there’s a catch.

HUD/Census reported September new home sales at an annual 593,000. That’s an improvement, but only because the report revised previous monthly rates downward, by nearly 85,000. From a year ago, September sales improved by nearly 30 percent.

Sales improved in three of four geographic regions. In the South, sales rose by 3.4 percent to 338,000 units in September, seasonally adjusted, from 327,000 units in August and improved by 25.7 percent from a year ago. In the Northeast, sales jumped by 33.3 percent to 32,000 units in September from 24,000 in August and improved by 60 percent from a year ago. In the Midwest sales rose by 8.6 percent to 76,000 units in September from 70,000 in August and improved by 33.3 percent from a year ago. In the West, however, sales were hampered by low inventories and fell by 4.5 percent in September to 147,000 units from August’s 154,000, but improved by 32.4 percent from a year ago.

Analysts did not seem too concerned by the revised numbers. Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. noted on a three-month moving average basis, sales increased 2.0 percent, advancing at an annual rate of 599,000 units, “suggesting that despite downward revisions the uptrend in new home sales remains intact.”

The median sales price of new houses sold in September rose to $313,500; the average sales price rose to $377,700. The seasonally adjusted estimate of new houses for sale at the end of September fell slightly to 235,000 units, representing a supply of 4.8 months at the current sales rate.

“Inventory remains at a historically low level,” Vitner said, noting that during September, only 57,000 new completed homes for sale came on the market, with 141,000 under construction.