The U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday morning that sales of new homes in September jumped to a seasonally adjusted annual rate of 667,000, an increase of 18.9% above the upwardly revised August rate of 561,000 and a rise of 17% compared with the September 2016 rate of 570,000. The consensus estimate from a survey of economists expected a rate of around 555,000. The August rate was revised upward by 1,000.
At the peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million. September’s annual rate of sales was the highest for the month in the past 10 years.
The Census Bureau also reported that the median sales price for new homes sold in September rose by $19,200 from $300,500 in August to $319,700, and the average sales price rose by $17,100 to $385,200. At the end of September, the number of new homes for sale totaled 279,000 and represented a supply of 5 months at the current sales rate.
In September, 43% of the estimated 52,000 monthly sales were sales for homes priced at less than $300,000. The percentage is down seven percentage points compared with the August rate. Sales of homes priced between $300,000 and $399,999 rose by three points to 26% of all sales. Sales of homes in the range of $400,000 to $499,999 remained flat at 12%, and sales rose from 10% to 14% for homes sold in a range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 5% of all new home sales in September, down one point compared with August.
The sharp price increase in both sales and price between August and September indicates that most transactions were likely made by move-up buyers as opposed to first-time buyers.
The increase in sales of houses priced below $300,000 indicates that first-time buyers took advantage of the reduced prices. In the South, home sales rose by 6,000 month over month in September as the region recovers from the effects of the hurricanes that struck last month.