September New Home Sales Plummet, Prices Remain Nearly Flat

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday morning that sales of new homes in September decreased to a seasonally adjusted annual rate of 553,000, a drop of 5.5% from the downwardly revised August rate of 585,000 and a decrease of 13.2% compared with the September 2017 rate of 637,000. The consensus estimate from a survey of economists expected a rate of around 625,000. The August rate was revised downward by 23,000.

At the peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million.

The Census Bureau also reported that the median sales price for new homes sold in September fell by $200 to $320,000, and the average sales price rose to $377,200. At the end of September, the number of new homes for sale on a seasonally adjusted basis totaled 327,000, up by 9,000 month over month, and represented a supply of 7.1 months at the current sales rate.

In September, 46% of the estimated 46,000 monthly total were sales for homes priced at less than $300,000. The percentage is up from 45% in August.

Sales of homes priced between $300,000 and $399,999 rose a point to 23% of all sales. Sales of homes in the range of $400,000 to $499,999 rose by three points to 17%, and sales fell by 4% 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 by two points compared with August.

On a seasonally adjusted basis, year-over-year new home sales are up 13.2% nationally. In the South, year-over-year new home sales are up 11.4%; in the Northeast sales are down 51.3%; in the Midwest sales are up 4.1%; and in the West sales are down 15.8%.

On a non-seasonally adjusted basis, homes sold in the South remained flat month over month in September at 24,000. Home sales were flat at 6,000 in the Midwest, while sales in the Northeast totaled 2,000, down by 1,000 month over month. Sales in the West fell by 3,000 to a total of 10,000.

At the end of September, the for-sale inventory (not seasonally adjusted) totaled 331,000, up 8,000 month over month. On a non-seasonally adjusted basis, inventory was up by 1,000 in the Northeast at 27,000 and flat in the Midwest at 42,000. In the South new homes for sale rose by 5,000 to 174,000 while supply in the West rose by 2,000 to 86,000.