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Economy in Brief

U.S. New Home Sales Surge as Prices Plummet
by Tom Moeller  December 4, 2013

New home sales during October jumped 25.4% to 444,000 following a 6.6% September decline. These figures were released jointly due to the federal government shutdown. The latest figure compared to expectations for 435,000 sales in the Action Economics Forecast Survey. The August sales figures were revised lower. These volume numbers are quoted at seasonally adjusted annual rates. 

The median price of a new home declined 4.5% to $245,800 (-0.6% y/y) which was the lowest level since November of last year. The average price of a new home improved 2.5% during October to $321,700, up 12.7% from a year ago.

Sales mostly improved around the country. In the Midwest, the one-third sales jump to 63,000 (21.2% y/y) recovered September's drop. That was followed by the South where sales rose 28.2% to 259,000 (41.5% y/y). Sales in the Northeast gained 19.2% to 31,000 (29.2% y/y) and new home sales in the West increased 15.2% to 91,000 (-14.2% y/y).

The inventory of unsold homes rose roughly one-quarter y/y and it's been backing up this year. The months' sales supply of new homes dropped sharply to 4.9. The length of time to sell a new home fell to a new low of 2.6 months, compared to 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database. 

U.S. New Home Sales Oct Sep Aug Y/Y 2012 2011 2010
Total SAAR, 000s 444 354 379 21.6 368 306 321
Northeast 31 26 29 29.2 29 21 31
Midwest 63 47 57 21.2 47 45 45
South 259 202 212 41.5 196 168 173
West 91 79 81 -14.2 97 72 74
Median Price (NSA, $) 245,800 257,400 258,600 -0.6 242,108 224,317 221,242
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