September New Home Sales Dip, But Pace Strengthens
HUD and the Census Bureau yesterday reported sales of new single‐family houses in September fell slightly from August but improved strongly from a year ago.
The report said new home sales came in at a seasonally adjusted annual rate of 701,000, 0.7 percent below the revised August rate of 706,000, but 15.5 percent higher from a year ago (607,000).
Regionally, sales fell in September in all regions except the Midwest, where sales rose by 6.3 percent to 67,000 units, seasonally annually adjusted, from 63,000 units in August but fell by 17.3 percent from a year ago.
In the South, sales fell by 0.2 percent in September to 424,000 units, seasonally annually adjusted, from 425,000 units in August and improved by 24 percent from a year ago. In the West, sales fell by 3.8 percent to 175,000 units in September from 182,000 units in August but improved by 11.5 percent from a year ago. In the Northeast, sales fell by 2.8 percent to 35,000 units in September from 36,000 units in August but improved by nearly 30 percent from a year ago.
The median sales price of new houses sold in September rose to $299,400; the average sales price rose to $362,700. The seasonally adjusted estimate of new houses for sale at the end of September was 321,000, representing a supply of 5.5 months at the current sales rate.
“Lower mortgage rates are lifting demand,” said Mark Vitner, Senior Economist with Wells Fargo Securities, Charlotte, N.C. “The data are highly volatile and subject to heavy revisions, but the trend in new home sales is one of strength.”
Vitner said lower mortgage rates have been “closer to a panacea” for new home sales than for resales, which are up only 3.9% year-over-year, compared to a 15.5% rise in new sales. “Existing home sales are more likely to be all-cash–roughly 20% of sales, according to the National Association of Realtors, compared to around 5% of new home sales,” he said. “Mortgage apps have cooled the past month but continue to augur improving sales in coming months.”
