New-home sales shot up in September, with sales of new, single-family homes up a stratospheric 18.9 percent to 667,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The average new-home sales price was $385,200, while the median was $319,700. New-home listing inventory was 279,000—5.0 months supply.
“The September sales numbers show that there is solid, growing demand for new-home construction,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB), on the NAHB Now blog. “However, builders need to continue to monitor rising construction costs to keep houses affordably priced.”
“New-home sales have bounced back from a few soft months and have returned to the strong growth trend we saw earlier this year,” said Robert Dietz, chief economist at the NAHB. “As existing-home inventory remains tight, we can expect new-home sales to continue to make gains in the months ahead.”
“After two months of weakness, new-home sales showed a strong pick-up in momentum from September to October,” says Danielle Hale, chief economist at realtor.com®. “Year-over-year sales growth was the third highest of the year. Home sales in the South surged after being hampered by hurricane-related weakness, in part because of post-hurricane adjustments and catch-up shopping. All regions showed a pick-up in sales from last month, and all regions except the Midwest are also showing growth from a year ago.
“The growth in prices for new homes also shows signs of slowing, though that hasn’t yet appeared in home listing prices, which are up 10 percent from a year ago,” Hale says. “The discrepancy between list price increases and sales price increases suggests that some buyers may have reached a limit on the price increases they can afford, but sellers have not yet caught on.”
“Newly-built homes were purchased at a furious pace last month, potentially driven by accelerated activity in the South following Hurricanes Harvey and Irma,” says Bill Banfield, vice president at Quicken Loans. “This unexpected surge can help with home inventory, which, just a month prior, was at a 20-year low. As owners in existing homes move on to newly built ones, it frees up availability of smaller starter homes for those looking to become homeowners for the first time.”
Source: U.S. Department of Housing and Urban Development (HUD)
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