October New Home Sales Dip, But Outlook Brighter
HUD and the Census Bureau yesterday reported sales of new single‐family houses in October fell slightly but performed strongly compared to a year ago.
The report said October new single-family sales fell to a seasonally adjusted annual rate of 733,000, 0.7 percent below the revised September rate of 738,000, but 31.6 percent higher than a year ago (557,000).
Regionally, sales were mixed. In the South (the largest region), sales fell by 3.3 percent in October, seasonally annually adjusted, to 436,000 units from 451,000 units in September but improved by nearly 41 percent from a year ago. In the West, sales jumped by 7.7 percent in October to 195,000 units from 182,000 in September and improved by nearly 22 percent from a year ago.
In the Northeast, sales dropped by 18.2 percent in October, seasonally annually adjusted, to 27,000 units from 33,000 units in September but improved by 17.4 percent from a year ago. In the Midwest, sales rose by 4.2 percent in October to 75,000 units from 72,000 units in September and improved by 17.2 percent from a year ago.
“Housing is turning into a meaningful bright spot,” said Mark Vitner, Senior Economist with Wells Fargo Securities, Charlotte, N.C. “The trend in new home sales continues to show solid improvement, with sales averaging a 725,667-unit pace over the past three months–the strongest pace of this expansion. The improvement in new home sales reflects the benefits of lower mortgage rates and more determined efforts by homebuilders to focus on more affordable homes. There also appears to be some increased migration from more expensive areas of the country to lower cost areas, with the South being the major beneficiary of this shift.”
HUD/Census reported the median sales price of new houses sold in October rose to $316,700; the average sales price rose to $383,300. The seasonally adjusted estimate of new houses for sale at the end of October rose to 322,000, representing a supply of 5.3 months at the current sales rate.