New home sales tumble in September
New home sales saw a double-digit drop in September, according to the latest Monthly New Residential Sales report released this morning by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Sales of new single‐family houses in September were at a seasonally adjusted annual rate of 603,000. This is a 10.9% decrease from the revised August rate of 677,000.
The latest report is also 17.6% below the September 2001 estimate of 732,000.
The median sales price of new houses sold in September increased nearly 8% to $470,600 compared to a median price of $435,800 in August.
The average sales price in September decreased by 2.3% to $517,700 from an average price of $529,000 in the prior month.
The National Association of Home Builders points to rising mortgage rates approaching 7% along with declining builder sentiment stemming from stubbornly high construction costs and weakening consumer demand as the primary culprits behind lagging home sales.
“Builders continue to face lower buyer traffic due to declining affordability conditions as the housing downturn continues,” said Jerry Konter, chairman of the NAHB and a home builder and developer from Savannah, Ga. “Builder sentiment has declined for 10 consecutive months. The entry-level market in high-cost areas has been particularly affected, with growing numbers of first-time and first-generation buyers priced out of the market.”
On the supply side, the seasonally‐adjusted estimate of new houses for sale at the end of September was 462,000. This represents a supply of 9.2 months at the current sales rate.
The revised supply number for the prior month was 8.1 months.
Here’s how new home sales performed by region in September:
- In the Northeast, new home sales spiked 56% on a month-over-month basis and jumped 25.8% compared to September 2021.
- In the Midwest, sales climbed 4.3% for the month and rose 10.6% above September 2021.
- In the South, sales plummeted 20.2% for the month and fell 19.3% on a year-over-year basis.
- In the West, sales edged ahead 1.1% and are up 23.2% from last year.
