Affordability haunts September new home sales
Affordability issues continue to slow the pace of new home sales.
Sales of newly built, single-family homes fell 5.5% to a seasonally adjusted annual rate of 553,000 in September after being downwardly revised in August, July, and June reports, according to the latest report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
This is the lowest sales pace since December 2016. On a year-to-date basis, sales are up 3.5% from this time in 2017, however.
“New home sales activity has slowed this summer as housing affordability remains a serious issue,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La. “However, sales are up from this time last year and builders continue to report consumer interest in housing.”
In addition to adjusting for seasonal effects, the September reading of 553,000 units is the number of homes that would sell if this pace continued for the next 12 months.
“Home price gains and rising interest rates are slowing down the housing market, particularly in high-cost areas and among entry-level buyers who are sensitive to price increases,” added NAHB Chief Economist Robert Dietz. “Builders need to provide homes at different price points to address these affordability concerns. Meanwhile, overall job and economic growth should help support the housing market in the months ahead as it adjusts to higher mortgage interest rates.”
The inventory of new homes for sale was 327,000 in September while the median sales price was $320,000. The median home price in September 2017 was $331,500, as the market has shifted to lower-cost homes.
Regionally, new home sales rose 6.9% in the Midwest but fell 1.5% in the South, 12% percent in the West and 40.6% in the Northeast.
Year-to-date, home sales are up in all regions expect the Northeast where sales are down 16.5% in volume.
Sales of newly built, single-family homes fell 5.5% to a seasonally adjusted annual rate of 553,000 in September after being downwardly revised in August, July, and June reports, according to the latest report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
This is the lowest sales pace since December 2016. On a year-to-date basis, sales are up 3.5% from this time in 2017, however.
“New home sales activity has slowed this summer as housing affordability remains a serious issue,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La. “However, sales are up from this time last year and builders continue to report consumer interest in housing.”
In addition to adjusting for seasonal effects, the September reading of 553,000 units is the number of homes that would sell if this pace continued for the next 12 months.
“Home price gains and rising interest rates are slowing down the housing market, particularly in high-cost areas and among entry-level buyers who are sensitive to price increases,” added NAHB Chief Economist Robert Dietz. “Builders need to provide homes at different price points to address these affordability concerns. Meanwhile, overall job and economic growth should help support the housing market in the months ahead as it adjusts to higher mortgage interest rates.”
The inventory of new homes for sale was 327,000 in September while the median sales price was $320,000. The median home price in September 2017 was $331,500, as the market has shifted to lower-cost homes.
Regionally, new home sales rose 6.9% in the Midwest but fell 1.5% in the South, 12% percent in the West and 40.6% in the Northeast.
Year-to-date, home sales are up in all regions expect the Northeast where sales are down 16.5% in volume.