Sales of new, single-family homes ebbed last month, but are still far ahead of where they were a year ago.
October sales fell to a seasonally adjusted annual rate of 999,000, a 0.3 percent drop from September’s revised estimate of 1.002 million. But home sales are still up 41 percent from a year ago, according to government data.
Americans are continuing to take advantage of record-low mortgage rates to buy new homes, squeezing existing supply. The total supply of single-family homes declined 40 percent to 3.3 months in October, meaning that’s how long it would take buyers to exhaust the new homes on the market.
More than half of all home sales in October — 580,000 — occurred in the southern half of the United States.
As demand rose last month, so did home prices. The median sale price of new houses sold in October was $330,600, up from $322,400 a year earlier.
Since the onset of the pandemic, demand for new homes has skyrocketed. In addition to low mortgage rates, buyers are also motivated by a desire for larger homes with work-from-home space.
Homebuilding confidence also reached new highs in October. Housing starts jumped 4.9 percent to 1.5 million in October, seasonally adjusted, compared to 1.4 million in September, according to the Census Bureau’s monthly report on residential construction.
Joel Kan, the Mortgage Bankers Association’s head of industry forecasting, noted that the increase in housing starts was driven by single-family home construction, which he said is at its highest level since 2007.