New Home Sales Down 4th Straight Month

It hasn’t been a very strong year for housing.

HUD and the Census Bureau yesterday reported sales of new single-family houses in September fell to a seasonally adjusted annual rate of 553,000, 5.5 percent below the revised August rate of 585,000 and 13.2 percent lower than a year ago (637,000). September’s drop marked the fourth consecutive monthly decline. And this before the measured effect of Hurricanes Florence and Michael.

Regionally, sales stumbled in the South, falling by 1.5 percent, seasonally adjusted, in September to 318,000 units from 323,000 units in August and fell from 11.4 percent from a year ago. In the West, sales fell by 12 percent to 139,000 units in September from 158,000 units in August and fell by nearly 16 percent from a year ago.

In the Midwest, sales rose by nearly 7 percent in September, seasonally adjusted, to 77,000 units in September from 72,000 in August and improved by 4.1 percent from a year ago. In the Northeast, sales plunged by more than 40 percent to 19,000 units in September from 32,000 in August and fell by 51.3 percent from a year ago.

“By nearly all accounts, the slide in new home sales appears to be demand driven and is not due to supply constraints,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “As such, single-family starts will likely fall further in coming months.”

The report said the median sales price of new houses sold in September rose to $320,000; the average sales price rose to $377,200. Inventories in September rose to 327,000, representing a supply of 7.1 months at the current sales rate.

The drop in prices reflects the impact of rising mortgage rates and a shift toward more modestly priced homes,” Vitner said.