The market for new construction single-family homes is losing momentum, as sales dropped for the fourth month in a row in September.
Seasonally adjusted sales of new homes fell by 5.5 percent to 553,000 in September from August and 13.2 percent year over year, according to federal figures reported by the Wall Street Journal.
The percentage drop was most drastic in the Northeast, where sales dropped by 51.3 percent to 19,000 sales from September 2017. The West, meanwhile, saw the most significant monthly drop in the number of sales so far this year. There were 19,000 fewer home trades in region than the month before, for a total of 139,000 sales in September. Strong activity in the South has helped buoy national numbers in past months, but sales in the region last month also fell year over year and compared to August.
The Midwest was the only region to mark gains on a yearly and monthly basis, recording 4.1 percent and 6.9 percent increases in total sales, respectively. The region had 77,000 home sales in September.
On top of that, the supply of homes on the market reached 7.1 months in September, the highest since March 2011, according to the Journal.
The housing market has struggled amid labor shortages, pricier building supplies and the higher cost of borrowing. Mortgage rates — along with commercial loan rates — have steadily crept upward with hikes of the Federal Reserve’s benchmark interest rate.
Median sales price was down on an annual basis — $320,000 compared to $331,500 last September. Home prices have generally maintained an upward trajectory over the last few years, but home appreciation is slowing, according to Redfin. The increase in price slowed in August to 4.7 percent, down from 7.6 percent year over year, marking the lowest rate in four years. [Wall Street Journal] – Dennis Lynch