New-home sales fell 5.6% in October, erasing the miraculous 12.3% growth seen in September.
Data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau states that sales of newly built, single-family homes were at a rate of 679,000 in October, down from September’s revised rate of 719,000. On the other hand, sales were up year-over-year by 17.7%.
“New home sales fell back in October as interest rates moved higher,” commented Alicia Huey, chairman of the National Association of Home Builders (NAHB). “Despite the challenging conditions, sales are up 4.6% on a year-to-date basis due to a lack of inventory in the resale market.”
New single-family home inventory was 439,000, up 1.4% from September but down 5.8% year-over-year. This represents a 7.8 months’ supply at the current building pace. Of total inventory, including new and existing homes, newly-built homes made up 30% of all single-family homes available for sale—compared to a 12% historical average.
The median sales price of new houses sold was $409,300, down 3.1% from September, and down 17.6% compared to a year ago. The average sales price was $487,000.
“Median new home prices have moved lower as new home size has decreased in 2023,” added NAHB Chief Economist Robert Dietz. “Combined with sales incentives and a lack of resale inventory, demand has remained solid in 2023 and should improve in 2024 as interest rates move lower.”
Regionally, new-home sales are up by 13.2% in the Northeast and 2.1% in the South, while they are down 16.4% in the Midwest and 23.3% in the West. On a year-to-date basis, all four regions were up: 10.3% in the Northeast, 8.5% in the Midwest, 19.2% in the South and 18.9% in the West.
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