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New-Home Sales Surge in October

New-home sales rose in October, with sales of new, single-family homes up 18.7 percent to 685,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The average new-home sales price was $400,200, while the median was $312,800. New-home listing inventory was 312,800—4.9 months supply.

“In the strongest year-over-year growth we’ve seen since 2017’s first quarter, increasing sales in all four regions drove U.S. new home sales up strongly in October—6.2% from September and 18.7% from one year ago,” said realtor.com Chief Economist Danielle Hale. “Although there are more new homes for sale, a strong increase in demand favors suppliers, not new home buyers. The month’s supply of new homes for sale is 4.9 months, lower than both September and October 2016 (5.2 months), and substantially lower than the nearly six months of supply we saw in new homes in July and August.

“The pick-up in new home sales should improve builder confidence and lead to more home construction, offering home buyers additional options and creating opportunities for current owners to trade into new homes, potentially unleashing existing home inventory,” Hale continued. “The number of existing homes for sale according to realtor.com data are down 8 percent from a year ago in October and increasing availability of homes for sale would be welcomed by home shoppers.”

Quicken Loans Executive Vice President Bill Banfield offered the following comments on the report: “Especially given the increase in the number of properties sold in which construction hadn’t yet started, we should feel confident that residential building will accelerate in coming months. That said, the high average selling prices pose a hurdle for younger homebuyers entering the market for the first time. A stable job market and sustained low mortgage interest rates continue to increase property prices.”

Source: U.S. Department of Housing and Urban Development (HUD)

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