Sales of newly built, single-family homes fell 11.5 percent to a seasonally adjusted annual rate of 468,000 units in September, according to newly released data from HUD and the U.S. Census Bureau.
“Despite this monthly drop, our members continue to tell us that housing is moving in the right direction,” says Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo. “Consumers may have simply been reacting to soft job numbers.”
“It is not surprising to see sales pull back in September following a strong August reading, especially after a few months of weak job creation,” says NAHB Chief Economist David Crowe. “However, new-home sales year-to-date are up 17.6 percent compared to the same period of 2014, and we expect the market to continue improving at a gradual but steady pace for the rest of year.”
Regionally, new-home sales were down across the board. Sales fell 61.8 percent in the Northeast, 8.3 percent in the Midwest, 8.7 percent in the South and 6.7 percent in the West.
The inventory of new homes for sale was 225,000 units in September. This is a 5.8-month supply at the current sales pace.
“The new home sales report covering September released today shows a rate well below the consensus estimate and indicates that real issues emerged late this summer in the new homes market, questioning the supposedly strong growth signals that were previously interpreted by many,” says realtor.com Chief Economist Jonathan Smoke.
“Last year we picked up momentum in the late summer and fall. This year seems to be the opposite—we are losing momentum,” Smoke continues. “The median new home price, $296,900 in September, increased 3 percent over August and is up 14 percent over last year. That is an important clue as to why growth seems to be stalling out: the median new home price had been declining since the end of last year, which is what we would need to see if builders were aiming to grow sales to first time buyers by providing more affordable, entry-level homes. However, the shift up this summer and fall reflects that few builders are able to offer product to first-time buyers.”
“When you take a step back and look at year-over-year growth, the overall housing picture looks promising despite September’s drop in new home sales,” says Quicken Loans vice president Bill Banfield. “However, a lack of inventory pushing up prices continues to be a thorn in the side of the overall housing market.”
For more information, visit www.nahb.org.
