Redfin 3Q New Home Sales Up 5.6%
Redfin, Seattle, said a drop in new home sales prices sparked an uptick in new home sales in the third quarter, the second consecutive quarterly increase.
The report noted new home sale prices dropped by 1.5 percent year over year to a median of $370,300 in the third quarter, the biggest decline since at least 2012 and the third consecutive quarter of declines.
Meanwhile, new-home sales rose 5.6 percent, marking the second consecutive quarter of increases. New home supply decreased by 7.9 percent year over year, the biggest inventory drop since at least 2012 and the second straight quarter of declines.
By contrast, Redfin said existing home prices rose 4.2 percent year over year, while sales increased 2.1 percent and inventory fell 6.9 percent.
Redfin Chief Economist Daryl Fairweather said the price decline for new homes is partly a reflection of builders responding to buyer demand for affordability, which strengthened sales. She said the surge in sales, along with a nearly 10 percent year-over-year increase in residential building permits–the biggest in two-and-a-half years–signals the beginning of a moderate recovery for the new-home market.
“Buyers are returning to the new-home market thanks to low mortgage rates and relatively low prices,” Fairweather said. “And builders, also taking advantage of low interest rates to fund projects, are paying attention to preferences for affordability, which has led to more sales. Residential construction was a bright spot in the economy in the third quarter, a sign that builders are working to fill an inventory gap. As we head into the new year, I expect more new-home listings to hit the market, which should help sustain the relatively high level of sales.”
The report can be accessed at https://www.redfin.com/blog/new-construction-q3-2019.