Contracts for new, single-family home sales inched down 0.7% in September to a 701,000 seasonally adjusted annual rate according to estimates from the joint release of HUD and the Census Bureau. The decline came off a downwardly revised August estimate, which was decreased from an initial reading of 713,000 to a new estimate of 706,000. Year-over-year, the September estimate is 15.5% higher. Sales in September continue strength supported by lower mortgage rates.
Total sales for the first nine months of 2019 (527,000) were 7.2% higher than the comparable total for 2018 (491,000). We expect sales volume to continue to trend up slightly in the coming months as more new homes are built.
For the first nine months of 2019 (and relative to the first nine months of 2018), new home sales were up 12.8% in the South, 7.3% in the West, and down 10.3% in the Northeast and 10.6% in the Midwest, due to some tax reform related effects and affordability.
Compared to last month, inventory of new homes for sale declined 0.6% to 321,000 in September. It is the fourth straight decline since June 2019. The current months’ supply stands at a balanced level of 5.5.
Median new home sales price (price of a home in the middle of the distribution) dropped 7.9% in September to $299,400 compared to August ($325,200) and 8.8% lower than a year ago ($328,300). Median new home sales price dipped below $300,000 for the first time since May 2016.
About 15% of newly built home sales are priced under $200,000 in September, compared to 10% last month and 9% one year ago. While more affordable entry-level homes were sold in September, the number of new homes priced above $400,000 decreased.