New home sales retreat in October
As has been the case for much of the summer and fall, mortgage rates and housing affordability continue to impact new home sales.
New single-family home sales fell 5.6% to a seasonally adjusted annual rate of 679,000 compared to the revised September rate of 719,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported this morning.
But the latest Monthly New Residential Sales report is 17.7% ahead of the October 2022 rate of 577,000.
“New home sales fell back in October as interest rates moved higher,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “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.”
The national median sales price of new houses sold in October 2023 was $409,300, falling 3.07$ from a revised median price of $422,300 in September. On a year-over-year basis, the median price plunged 17.6% compared to a median price of $486,900 in October 2022.
“Median new home prices have moved lower as new home size has decreased in 2023,” said 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.”
The average sales price for October was $487,000, declining 5.5% compared to the revised September average price of $519,400. In comparison to October 2022, the average price is down nearly 10.4% and a cost of $543,000.
Regarding supply, the seasonally adjusted estimate of new houses for sale at the end of October was a 7.8-month count of 439,000 based on the current sales rate.
Total new homes for sale in October inched up 1.4% from September but are down 5.8% from October 2022.
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, according to the NAHB.
Here’s how new home sales performed on a regional basis:
- In the Northeast, sales increased 13.2% on a month-over-month basis and jumped 10.3% on a year-over-year basis.
- Sales in the Midwest dropped 16.4% but are 8.5% ahead of October 2022.
- The South saw sales move up 2.1% while soaring 19.2% on a year-over-year basis.
- In the West, new single-family home sales plummeted 23.3% in October. Sales are ahead of October 2022 by nearly 19%, however.
