New Home Sales Fall to Two-Year Low in October 2024

Sales of new homes slumped to a two-year low in October, but there’s more to it than meets the eye.

Last month, sales of new, single-family homes fell to an annualized rate of 610,000, Bloomberg reported. Data released by the government showed a 17 percent annual decline, far worse than estimates gathered by the publication. The numbers also represented a reversal of September’s sales increase.

The decline in the South was particularly prominent. Sales fell 28 percent year-over-year in the region to an annualized pace of 339,000. That’s the slowest pace of sales in the region since the first full month of the pandemic.

But the region was also walloped twice by major storms last month. Hurricanes Helene and Milton wreaked havoc on the Southeast, slowing transactions as prospective buyers dealt with more immediate problems than purchasing a new home.

Sales of new homes actually rose in the Northeast and Midwest, though they fell in the West.

Across the country, affordability remained a huge factor in the market. The median sale price of a new home was $437,300, a 14-month high. Mortgage rates, meanwhile, are back on the rise because of economic data and expectations about the effects of President-elect Donald Trump’s tariffs and other policies.

“Spiking mortgage rates knocked the wind out of new home sales, as the quick rise from 6 percent to 7 percent pushed buyers to the sidelines,” Navy Federal Credit Union economist Robert Frick said.

In better news for the market, inventory is picking up to levels not seen in more than a decade. The supply of new homes increased 2.1 percent year-over-year to 481,000, which is 9.5 months’ worth of inventory at the current sales pace.

The long-term picture for production of homes is unclear, as Trump’s promised mass deportations would reduce the number of construction workers. But the first Trump administration actually kicked far fewer people out of the country than the Biden administration has.

— Holden Walter-Warner