New home sale prices rise but buyers are hanging back

Median sales price of newly-built homes rose 4.5% in September, but overall sales numbers dipped

National /
Oct.October 26, 2020 01:00 PM
(iStock)

(iStock)

Americans paid more for newly-built homes last month but they didn’t buy as many of them.

The median price of new homes that sold in September was $326,800, up 4.5 percent from August, according to the Census Bureau’s monthly report of signed contracts and paid deposits for newly-built single family homes.

The data comes as the number of new homes sold last month — seasonally adjusted — fell 3.5 percent, to 959,000, from over 1 million in August.

The report found that September’s rate of sales for newly-built homes is up 32 percent year-over-year, despite the August dip.

Meanwhile, the number of new homes on the market increased. By the end of September, there were 284,000 new homes listed for sale, about a three-and-a-half-month supply, according to Census Bureau estimates. That’s an increase in supply from 282,000 new homes on the market at the end of August.

Buyers continue to pull the trigger on new properties early in the development process.

About 67 percent of the homes sold last month across the U.S. were either under construction or had not yet begun to be built, according to the report’s preliminary seasonally adjusted numbers.

The northeast region saw the biggest dropoff in sales with 32,000 new homes sold last month, down nearly 29 percent from the 45,000 sold in August. The western region was the only area to see an uptick in the number of new homes sold in September. It saw a nearly 4 percent uptick, to 271,000 new homes sold last month, from 261,000 in August.

About 60 percent of the homes listed for sale at the end of September were under construction, based on the report’s preliminary seasonally adjusted numbers.

The decline in new home sales in September contrasts with the volume of existing homes sold. Last month, 6.5 million existing homes sold, a jump of more than 9 percent compared to August’s record-setting sales month.

Despite the September drop in new home sales, the industry appears to expect strong demand to continue from buyers, in large part because of the nation’s historically-low housing supply.

That fact has propelled developers. September housing starts surged to 1.4 million, seasonally adjusted, as homebuilder confidence hit its highest levels in 35 years early this month.





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