New home sales down almost 9%
Sale of newly-built single-family homes fell 8.9% in October to a seasonally adjusted annual rate of 544,000 units.
The HUD and US Census Bureau released figures Wednesday which also show an upwardly-revised September reading. Year-over-year, October’s new home sales were up 2.8%.
LendingTree chief economist Tendayi Kapfidze says the month-over-month decline is real but may be overstated.
“An upward revision to September sales, from 553 to 597 was likely due to measurement challenges from natural disasters, with August sales also revised upwards. Similar challenges may have affected October’s data and it may be revised upwards in subsequent months,” he said.
But National Association of Home Builders senior economist Danushka Nanayakkara-Skillington says that affordability remains a challenge for potential buyers.
“While a solid economy and positive demographics support future demand for housing, it is critical to address this mounting affordability crisis,” she said.
Year-to-date, new home sales rose 6.3% in the Midwest, 4.1% in the West, and 3.8% in the South; but fell 17.1% in the Northeast.
Supply at 7-year high
The inventory of homes for sale also rose to the highest since January 2009 (336,000) and the 7.4 months of supply was the highest since March 2011.
The median sales price fell 3.6% to $309,700, as the market is shifting to townhomes and other lower-cost houses.
“Policymakers should see this drop in sales as an indicator that housing affordability will continue to slow down the market,” said Randy Noel, chairman of the National Association of Home Builders.
