New Home Sales Finally Level Off at 14 Year High

New home sales declined in September for the first time since April. The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes were sold at a seasonally adjusted annual rate of 959,000 units, a 3.4 percent decline from the prior month. Further, the 1,011,000 sales reported in August were revised down to 994,000. Nonetheless, sales are still up 32.1 percent from one year ago.

Sales were below all the predictions from the Econoday panel of analysts. Those ranged from 1.0 million to 1.05 million.  Their consensus was 1.016 million units. Econoday said its consensus forecast had fallen short of actual sales in each of the previous five months.

On a non-adjusted basis there were 75,000 new homes sold during the month compared to 82,000 in August and 56,000 in September 2019. Slightly less than one-third of the homes sold (24,000) were ready for occupancy while the remainder were almost equally divided between homes under construction and homes for which construction had not been initiated.

For the year-to-date 618,000 homes have sold. This represents a 16.9 percent increase over the 529,000 homes sold in the first nine months of last year.

The median price of a home sold during the month was $326,800 and the average price was $405,400. The respective sales prices in September of last year were $315,700 and $372,100.

At the end of the reporting period there were an estimated 284,000 new homes available for sale, a 3.6-month supply at the current sales pace. A year earlier the 321,000 available homes were projected to be a 5.3-month supply.

Sales of newly constructed homes declined by 28.9 percent in the Northeast compared to August and were 5.9 percent lower on an annual basis. In the Midwest sales were down 4.1 percent for the month but rose 34.8 percent year-over-year. There was a 4.7 percent decline in the South although the annual increase was 27.4 percent. The West posted the only monthly gain, 3.8 percent, and sales were 49.7 percent higher than in the prior September.