New Home Sales Remain Near 12-Year High
The U.S. Census Bureau and the Department of Housing and Urban Development reported Tuesday morning that sales of new homes in September decreased to a seasonally adjusted annual rate (SAAR) of 701,000, a drop of 0.7% from the revised August rate of 706,000 but an increase of 15.5% compared with the August 2018 rate of 607,000. The consensus estimate from a survey of economists projected a rate of around 698,000. The August 2019 rate was revised downward by 7,000.
Sales of new homes rose above 700,000 for two consecutive months in August and September, the first time that has occurred in a dozen years.
On a non-seasonally adjusted basis, new home sales are averaging an annualized sales rate of 527,000, up by 36,000 compared with the first nine months of 2018.
At their 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 $29,000 to $299,400 and the average sales price dropped month over month by $41,500 to $362,700. At the end of September, the number of new homes for sale on a seasonally adjusted basis totaled 321,000, down by 5,000 month over month, and represented a supply of 5.5 months at the current sales rate.
In September, 50% of the estimated 54,000 monthly total comprised sales for homes priced at less than $300,000. The percentage is up eight percentage points from August. The pricing data suggests that more first-time buyers were able to buy a home in September.
Sales of homes priced between $300,000 and $399,999 also increased month over month from 21% to 25% of all sales. Sales of homes in the range of $400,000 to $499,999 fell by six points to 8% of the total, and sales decreased by two points to 13% for homes sold in a price range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 4% of all new home sales in September, down four points compared with August.
In the South, seasonally adjusted year-over-year new home sales for the first nine months of 2019 are up 24%; in the Northeast, sales are up 29.6%; in the Midwest, sales are down 17.3%; and in the West, sales rose by 11.4%.
It’s worth noting that the monthly totals are subject to multiple revisions and those revisions are often significant.