New Home Sales Highest in 12 Years

The headline for the new home sales report for October was the year-over-year increase in sales. While sales of newly constructed homes were actually slightly lower than in September, they surged to surpass sales a year earlier by 31.6 percent, more than doubling the annual increase the prior month.

The U.S. Census Bureau and Department of Housing and Urban Development reported sales during the month at a seasonally adjusted annual rate of 733,000, down 0.7 percent from September. That previous number, however, was revised from an originally reported 701,000 to 738,000 units.  Sales in October 2018 were at the rate of 557,000 units.

Analysts had expected sales to be up slightly from September at a consensus of 707,000.  Estimates gathered by an Econoday poll all fell short, with a range of 690,000 to 720,000.

On a non-adjusted basis, there were 57,000 newly constructed homes sold during the month, unchanged from September but up from 43,000 a year earlier.  On a year-to-date basis, sales have totaled 586,000 units, 9.6 percent more than during the same period in 2018.

The median sales prices of a home sold in October was $316,700, compared to $328,300 in October 2018. The average price was $383,300, down from 394,900 a year earlier.

Sales declined by 18.2 percent in the Northeast compared to the previous month but were 17.4 percent higher year-over-year.  The Midwest saw an increase of 4.2 percent and 17.2 percent for the two earlier periods.

Sales in the South dipped 3.3 percent from September but were 40.6 percent higher on an annual basis. The West posted gains of 7.1 percent and 21.9 percent respectively.

At the end of the reporting period there were an estimated 322,000 new homes for sale.  The Census Bureau reports this as a 5.3-month supply at the current rate of sales, up from 5.2 percent in September.  The inventory has declined by 26.4 percent since October 2018 when the supply was estimated at 7.2 months.