New home sales stumble in September

New home sales took a step back in September.

Sales of new single-family houses fell 3.5% to a seasonally adjusted rate of 959,000 from the revised August rate of 994,000, according to the latest New Residential Sales report from the U.S. Census Bureau and the Department of Housing and Urban Development.

But the latest figure is 32.1% above the September 2019 estimate of 726,000.

“With sales up 32% from a year ago, the demand for new single-family homes remains strong as interest rates are at historic lows,” said NAHB Chairman Chuck Fowke. “However, the recent run-up in lumber and other material costs is leading to an increase in pricing.”

The median sales price of new houses sold in September 2020 was $326,800, rising 1.36% from the August rate of $322,400. Year-over-year, the median price increased 3.5% from $315,700 in September 2019.

The average sales price increased 6% to $405,400 in September from an average of $382,700 in August. On a year-over-year basis, the average sales price jumped 9% from the September 2019 average price of $372,100.

“The pace of new home sales growth over the summer was going to slow given that the gap between sales and single-family construction reached an all-time high in August,” said NAHB Chief Economist Robert Dietz. “Indeed, September sales of new homes that had not started construction were up 47% compared to a year ago.”

The current inventory at the end of September was 284,000 new single-family homes, representing a 3.6-month supply. This is a 5.9% increase from a supply of 3.4 months in August but a 32.1% plummet from the 5.3-month supply in September 2019.

Here’s how new single-family home sales performed in September by region:

• Sales in the Northeast declined 28.9% and decreased 5.9% on a year-over-year basis.
• In the Midwest, sales are down 4.1% and but soared 34.8% on a year-over-year basis.
• Sales in the South fell 4.7% but jumped 24.7% on a year-over-year basis.
• In the West, sales climbed 3.8% and rocketed 49.7% on a year-over-year basis.

The complete Monthly New Residential Sales report for September 2020 is available here.