Sales of newly built, single-family homes decreased 0.7% to a seasonally adjusted annual rate of 733,000 units in October, off strong upward revisions to the September reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
On a year-to-date basis, new home sales for 2019 are 9.6% higher than the same period in 2018. Moreover, the past two months represent the highest monthly sales rate since October 2007.
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“Forty-five percent of homes sold in October were priced below $300,000, which is an indication that more millennial buyers are taking advantage of low mortgage rates and entering into the marketplace,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB), and a home builder and developer from Torrington, Conn.
“For-sale inventory remains tight as this marks the third consecutive month below a six-month supply,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president of forecasting and analysis. “The low inventory rates show there is a need for added construction to meet growing demand.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the October reading of 733,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 322,000 in October, representing a 5.3 months’ supply. The median sales price was $316,700. The median price of a new home sale a year earlier was $328,300.
Regionally, and on a year-to-date basis, new home sales are 15.7% higher in the South and 9.1% higher in the West. Sales are down 11.1% in the Northeast and 7.5% in the Midwest.