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 median sales price of new homes stood at $US296,900, up from $US261,500 a year ago.
New United States single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground. New home sales, which account for 7.8 per cent of the housing market, tend to be volatile on a month-to-month basis because they are drawn from a small sample.
Those fundamentals are making homebuilders more confident about the outlook, with the National Association of Home Builders/Wells Fargo sentiment gauge climbing in October to a 10-year high.
The housing index .HGX fell more than 1 percent on the data, in line with a weaker stock market.
Purchases dropped in all of four regions in September, led by a record 61.8 percent slump in the Northeast from a month earlier. “The new data for September and revisions to July and August question the supposedly strong growth signals that were previously interpreted by many”. And the number of homes under construction is at a six-and-a-half year peak. First-time buyers of existing structures made up only 28 percent of all buyers last month.
“Last year we picked up momentum in the late summer and fall”, says our chief economist, Jonathan Smoke. If more houses pop up in a desirable area, those trying to sell nearby homes won’t be able to ratchet up prices almost as much as if supply were limited.
Sales of existing homes rose 4.7 per cent in September to the second-highest pace in eight years, as continued low interest rates and pent-up demand supported the housing recovery. “The housing market, however, while a positive contribution to headline activity, will not be enough to propel the economy beyond this stagnant 2 percent growth pace”.
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After last month putting off a rate increase, Fed officials will meet again this week.
