October New Home Sales Tumble Again, For-Sale Inventory Rises
The U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday morning that sales of new homes in October decreased to a seasonally adjusted annual rate of 544,000, a drop of 8.9% from the upwardly revised September rate of 597,000 and a decrease of 12% compared with the October 2017 rate of 618,000. The consensus estimate from a survey of economists was a rate of around 575,000. The September rate was revised upward by 44,000.
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 October fell by $10,300 to $309,700, and the average sales price rose month over month by $17,800 to $395,000. At the end of October, the number of new homes for sale on a seasonally adjusted basis totaled 336,000, up by 9,000 month over month, and represented a supply of 7.4 months at the current sales rate.
In October, 50% of the estimated 42,000 monthly total were sales for homes priced at less than $300,000. The percentage is up from 46% in September.
Sales of homes priced between $300,000 and $399,999 remained unchanged at 23% of all sales. Sales of homes in the range of $400,000 to $499,999 fell by five points to 12%, and sales fell by 2% for homes sold in a range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 7% of all new home sales in September, up by two points compared with September.
On a seasonally adjusted basis, year-over-year new home sales are down 12% nationally. In the South, year-over-year new home sales are down 11.6%; in the Northeast, sales are down 46.3%; in the Midwest sales are down 16.7%; and in the West sales are down 1.3%.
On a non-seasonally adjusted basis, homes sold In the South dropped by 1,000 to 25,000 month over month in October. Home sales were also down 1,000 at 5,000 in the Midwest, while sales in the Northeast remained flat at 2,000. Sales in the West also remained flat at a total of 11,000.
At the end of September, the for-sale inventory (not seasonally adjusted) totaled 341,000, up 15,000 month over month. On a non-seasonally adjusted basis, inventory was up by 1,000 in the Northeast at 28,000 and up by 2,000 in the Midwest at 43,000. In the South new homes for sale rose by 7,000 to 179,000 while supply in the West rose by 5,000 to 91,000.
It’s worth noting that the monthly totals are subject to multiple revisions and those revisions are often significant.