WASHINGTON, D.C. — Elevated mortgage rates and economic uncertainty continued to keep many prospective buyers out of the market, weighing on new home sales in September.
Sales of newly built single-family homes edged down 0.6% in September to a seasonally adjusted annual rate of 676,000, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. That followed a downwardly revised August estimate, and the September pace was 5.3% below the level from a year earlier.
“Affordability remains a significant hurdle for prospective home buyers,” said Bill Owens, chairman of the National Association of Home Builders (NAHB) and a home builder and remodeler from Worthington, Ohio. “Builders continue to offer incentives and adjust pricing to attract buyers, but elevated mortgage rates and high home prices are limiting the number of households that can afford to purchase a home.”
“The decline in new home sales is consistent with softer builder sentiment and highlights the continued sensitivity of housing demand to financing costs,” said Danushka Nanayakkara-Skillington, NAHB assistant vice president for forecasting and analysis. “Sustained improvements in mortgage rates and housing affordability would help maintain demand.”
A new home sale is counted when a sales contract is signed or a deposit is accepted. The home may be at any stage of construction: not yet started, under construction or already completed. After seasonal adjustment, the September figure of 676,000 units reflects the annualized pace of sales if it were to continue for 12 months.
Inventory of new single-family homes fell to 476,000 units in September, down 1% from August and 2.3% from a year earlier. At the current building pace, that amount represents an 8.4-month supply. Of that total, 111,000 homes were completed and ready for occupancy.
The median price of a new home rose 3.9% from August to $400,400, though it was 3.9% lower than a year earlier.
By region, year-to-date new home sales declined 0.5% in the Midwest, 1.3% in the South and 9.2% in the West, while sales increased 2.3% in the Northeast.
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