Sales of newly built, single-family homes increased 5.7% to a seasonally adjusted annual rate of 313,000 units in September, according to data from the U.S. Commerce Department. This marks the fastest pace of new-home sales in the past five months.
"Today's report highlights the gradual improvement in housing market conditions that is becoming evident in certain pockets of the country, as consumers who can surmount very restrictive lending standards to qualify for a favorable mortgage rate seize on this opportunity to buy," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.
"The latest numbers also reveal that first-time buyers are driving the new-homes market right now, as evidenced by the volume of lower-priced, entry-level homes under contract,” he added. “It's worth noting that these consumers are very dependent upon federal policies and programs that support homeownership, such as the mortgage interest deduction and low-downpayment mortgage options that have been threatened by recent government proposals."
Regionally, new-home sales registered gains of 11.2% and 9.7% in the South and West, respectively, and declines of 4.2% and 12.2% in the Northeast and Midwest, respectively.
The inventory of new homes for sale held at an all-time record low of 163,000 units in September, which represents a 6.2-month supply at the current sales pace.
"The improved rate of new-home sales in September is on par with NAHB's forecast for the overall number of sales this year and in keeping with the spotty improvements that our latest builder surveys have highlighted in select markets," said NAHB chief economist David Crowe. "While 313,000 is still an exceptionally low rate of new-home sales by historic standards, it is an encouraging sign of an anticipated broader recovery over the course of next year, and builders have helped the situation by keeping their inventories of homes for sale very lean in areas where there is an oversupply of existing units."