Price concession may be a key factor behind the September and August gains, gains that have lifted sales from this year's earlier run in the low 400,000s. The median price plunged a monthly 9.7 percent to $259,000. The year-on-year rate is in the minus column, at minus 4.0 percent, for only the second time in the last two years. Before this month, the year-on-year price was trending upward in the high single digits.
Supply is stable in the report with 207,000 new homes on the market vs 204,000 in August while supply relative to sales is unchanged at 5.3 months.
A look at sales by regions shows the Midwest with the largest monthly gain, at 12.3 percent, with the South, where total sales far exceed all other regions combined, at plus 2.0 percent in the month. The only region in the negative column is the West at minus 8.9 percent, a loss however that follows August's giant 28.1 percent surge.
This report is always volatile, but the revision to August merely averages out the volatility. New home sales, with the help of low mortgage rates and an improving jobs market, are moving in the right direction.
Recent History Of This Indicator:
New home sales, in a report that is frequently volatile due to a relatively small sample, surged 18.0 percent in August to a much higher-than-expected annual rate of 504,000. This was the biggest monthly increase since January 1992. Another positive in the report was a notable upward revision for July to 427,000 from the initial estimate of 412,000. Low supply has been a stubborn problem holding down both sales of new homes and existing homes, and the surge in August sales has made this problem more pronounced. Supply of new homes at the current sales rate fell in August to 4.6 months from 5.6 months in the prior month. Builders will likely be scrambling to bring new homes onto the market which in August totaled 203,000 units versus 201,000 in July.
New home sales, in a report that is frequently volatile due to a relatively small sample, surged 18.0 percent in August to a much higher-than-expected annual rate of 504,000. This was the biggest monthly increase since January 1992. Another positive in the report was a notable upward revision for July to 427,000 from the initial estimate of 412,000. Low supply has been a stubborn problem holding down both sales of new homes and existing homes, and the surge in August sales has made this problem more pronounced. Supply of new homes at the current sales rate fell in August to 4.6 months from 5.6 months in the prior month. Builders will likely be scrambling to bring new homes onto the market which in August totaled 203,000 units versus 201,000 in July.
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