US New Home Sales Slump 5.6% in October, Downwardly Revised for September

New home sales fell 5.6% month-over-month in October to a seasonally adjusted annual rate of 679,000 units (consensus 720,000) from a downwardly revised 719,000 (from 759,000) in September. On a year-over-year basis, new home sales were up 17.7%. Noticeably new home sales activity slumped in October despite a big drop in median and average selling prices. The latter had to do with a large decline in sales in the high-priced West region. What is clear is inflation and high mortgage rates and generally high home prices continue to limit affordability for prospective buyers. Bond market yields fell immediately after the report.

Home Sale
Home sales

US new home sales for October 2023

  • New home sales decreased 5.6% month-over-month in October to a seasonally adjusted annual rate of 679,000 units (consensus 720,000) from a downwardly revised 719,000 (from 759,000) in September.
  • On a year-over-year basis, new home sales were up 17.7%.
  • US homes for sale at the end of October 0.439 million units versus 0.433 million units in September
  • New home sales supply 7.8 months in October from 7.2 months in September
  • Median sale price $409,300 which is down -17.6% from October 2022
  • Average sale price of $487,000 versus $543,300 from October 2022
MONTHLY NEW RESIDENTIAL SALES, October 2023

New home sales month-over-month by region:  

  • Northeast -13.2%
  • Midwest -16.4%
  • South +2.1%
  • West -23.3%

Note new home sales in the West has the highest concentration of higher-priced homes. The report reflects how rising mortgage rates are impeding sales of higher-priced homes, evidenced by the year-over-year declines in both median and average selling prices.

The report confirms the effect of rates and new home sales remain concentrated in higher-priced homes, as inflation pressures, pushed by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.

United States New Home Sales

Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.

The big question is after the surge in rates and slash in rates how much damage has been done with the massive wealth erosion.

Source: Census.gov

From The TradersCommunity News Desk