New Home Sales Post Double Digit September Gain

Sales of newly constructed homes surged unexpectedly in September, reaching the highest rate since March. However, a downward revision in the August numbers left sales still significantly below those a year earlier. The U.S. Census Bureau and Department of Housing and Urban Development said newly constructed single-family homes sold at a seasonally adjusted annual rate of 800,000 units during the month. This was a 14.0 percent gain from the 702,000-unit pace in August. That estimate was originally reported at 740,000 units. Sales in September 2020 were at a seasonally adjusted rate of 971,000 units, 17.6 percent above this September's sales pace.

Analysts polled by both Econoday, and Trading Economics had a consensus forecast of 760,000 in sales.

Sales on an unadjusted basis during the month totaled 65,000 homes, up from 57,000 in August. For the year to date there have been 614,000 homes sold, 1.0 percent fewer than the 620,000 sold through September of 2020.

The median price of a home sold in September was $408,800 compared to $344,400 a year earlier. The average prices for the two periods were $451,700 and $405,100, respectively.

At the end of September there were an estimated 379,000 new homes for sale. This is estimated at a 5.7-month supply at the current rate of sales. In August, the inventory was sufficient for 6.5 months, while in September of 2020 there was only a 3.5-month supply.

Two regions accounted for most of the sales increase in September. The Northeast saw a jump of 32.3 percent compared to August, bringing sales up 7.9 percent on an annual basis. Sales in the South rose 17.8 percent but remained 11.7 percent lower year-over-year.

New home sales dipped 1.5 percent from August in the Midwest and are running at a 34.0 percent deficit annually. The West is also down significantly from last year, 27.6 percent, but did see sales rise 8.2 percent from August to September.