New home sales plummeted 11.5% between August and September, reaching a seasonally adjusted rate of 468,000, the Commerce Department reported Monday.
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The pace of new-home sales in the US sank 11.5% in September to the lowest level in 10 months, owing to an unusually large dropoff in the Northeast.
New home sales contracted month-over-month in all four regions, falling by 61.8 percent in the Northeast, 8.7 percent in the South, 8.3 percent in the Midwest, and 6.7 percent in the West.
The median price of a new home in September was 13.5% higher compared to one year ago: $296,900 vs. $261,500.
Despite the seemingly serious drop in September’s new home sales results, the statistic is often volatile and revised the following month.
Americans’ zeal for newly built homes took off this year – yet now appears close to having topped out.
The moderation in new home sales is likely to be short-lived as other housing reports have painted an upbeat picture of the sector. Economists polled by MarketWatch had forecast sales to achieve a seasonally adjusted 550,000 rate.
The slowdown in home sales, however, also comes at a delicate time for the US economy. There were 225,000 new houses on the market at the end of last month, up from 216,000 in August. Builders may need confirmation that fundamentals supporting the housing recovery – job growth and cheap borrowing costs – remain in place before investing in additional land and labor.
The revision to the August rate added 7,000 to the month’s total, making the September drop just that much worse. Solid hiring over the past three years has improved many family balance sheets, while rising home prices has returned equity to current homeowners now seeking to upgrade to new residential developments.
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Meanwhile the number of existing properties on the market decreased 2.6 percent to 2.21 million, the fewest since April.
