New Home Sales Plunge in September Drops 11.5 Percent, Compared to August
Sales of new homes took a precipitous decline in September, but the year-to-year and year-to-date numbers are both still in positive territory.
Sales of new single-family homes plummeted 11.5 percent to 468,000 units in September, compared to August, according to U.S. Census Bureau data.
The sharp decline could have been caused by events in the Northeast, a region where sales fell by nearly 62 percent month-to-month.
But nationwide sales are still up 2.0 percent on a year-to-year basis, with 459,000 units purchased in September 2014.
The median price of houses sold in September was $296,000, and the average sales price was $364,100. The number of new homes available at the end of the month was estimated at 225,000 units, for a supply of 5.8 months at the current sales rate.
Month-to-month sales dropped in all four major regions of the U.S., with the Northeast plunging 61.8 percent. The Midwest fell 8.3 percent, the South declined 8.7 percent, and the West shed 6.7 percent.
The Northeast also nosedived on a year-to-year basis, down 56.7 percent, while the Midwest dropped 8.3 percent. The South gained 8.3 percent, however, and the West also increased sales, up by 8.6 percent.
Not To Worry, The NAHB Says:
September's new-home sales report is somewhat disappointing, in part because housing starts were up 6.5 percent for the month and existing home sales increased 4.7 percent.
But the National Association of Home Builders said the downturn in home sales should not be considered worrisome.
"Despite this monthly drop, our members continue to tell us that housing is moving in the right direction," Tom Woods, chairman of the NAHB, said. "Consumers may have simply been reacting to soft job numbers."
Tom Crowe, chief economist for the NAHB, noted that sales are up 17.6 year-to-date, or from January to the end of September 2015.
"It is not surprising to see sales pull back in September following a strong August reading, especially after a few months of weak job creation," Crowe said. "We expect the market to continue improving at a gradual but steady pace for the rest of year."
Some Concern Warranted
New home sales fell 11.5 percent in September from August, to 468,000 units, a drop that was far more severe than expected, Zillow, the real estate market and research firm, said. Sales numbers in previous months have also been revised downward.
Other key points:
o September was the second consecutive month that new and existing home sales moved in opposite directions. It was also the fifth time this has happened in the past seven months.
o The median price of new homes sold in September increased 1.4 percent month-to-month. The price has also risen 13.5 percent from September 2014, the strongest annual gain in the median price of new homes since August 2014. But through the first nine months of 2015, median new home prices are flat compared to the same period last year, Zillow said.
o Compared to September 2014, new home sales were up 2.0 percent, their weakest year-to-year gains since November 2014.
o There were 23,000 fewer sales in August, which diminished the initially reported 9.7 percent monthly increase to 5.2 percent.
o In July 2015, combined existing and new home sales surpassed the 6 million mark for the first time since May 2007. Since then, sales have been up and dowm compared to that threshold. It was below that level in August, and rose back above it in September. Zillow estimates it will likely fall below it again in October. Combined home sales stood at slightly more than 6 million during the late 1990s and early 2000s, just before the housing boom of the mid-2000s.