6 BuildersOutlook 2024Issue10
New Home Sales Rise in September as Mortgage Rates Ease
Home buyers moved off the sidelines in September following the Federal Reserve ’ s recent move to cut interest rates for the first time in four years . Sales of newly built , singlefamily homes in September increased 4.1 % to a 738,000 seasonally adjusted annual rate from a downwardly revised August number , according to newly released data from the U . S . Department of Housing and Urban Development and the U . S . Census Bureau . The pace of new home sales in September is up 6.3 % compared to a year earlier . “ Despite challenging affordability conditions , home builder confidence edged higher in October as they anticipate that mortgage rates will gradually , in an uneven manner , moderate in the coming months ,” said Carl Harris , chairman of the National Association of Home Builders ( NAHB ) and a custom home builder from Wichita , Kan . “ There is a significant need for additional housing supply , as many prospective home buyers are entering the market .” “ Following the Fed ’ s actions in September , mortgage rates fell to 6.18 %, from 6.5 % in August ,” said Jing Fu , director of forecasting and analysis for NAHB . “ However , new home sales will likely weaken in October due to a recent rise in long-term rates .” 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 . In addition to adjusting for seasonal effects , the September reading of 738,000 units is the number of homes that would sell if this pace continued for the next 12 months . New single-family home inventory in September remained elevated at a level of 470,000 , up 8.0 % compared to a year earlier .
This represents a 7.6 months ’ supply at the current building pace . Completed for-sale new homes rose to 108,000 , the highest level since 2009 . The median new home sale price in September was $ 426,300 , essentially unchanged from a year ago . The Census data reveals a gain for new home sales priced below $ 300,000 , which made up 17 % of new home sales in September , compared to 14 % a year ago . Regionally , on a year-to-date basis , new home sales are up 19.2 % in the Midwest , 1.1 % in the South and 3.4 % in the West . New home sales are down 1.1 % in the Northeast .
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