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Economy in Brief

U.S. New Home Sales and Prices Decline
by Tom Moeller  October 24, 2018

The market for new homes weakened sharply this year. New single-family home sales fell 5.5% (-13.2% y/y) during September to 553,000 (SAAR). It was the fourth consecutive monthly decline, pushing sales 13.1% below the high reached in November 2017. The latest decline followed a 3.0% August fall to 585,000, revised from 629,000, and a 1.5% July drop to 603,000, revised from 608,000. Expectations had been for 625,000 September sales in the Action Economics Forecast Survey. Sales are calculated when contracts are closed and are tabulated by the National Association of Realtors.

The median price of a new home improved 0.3% (-3.5% y/y) to $320,000 from $319,200 in August. The average price of a new home declined to $377,200 (-0.6% y/y).

Last month's decline in new home sales was led by a 40.6% shortfall (-51.3% y/y) in the Northeast to 19,000, the lowest level since April 2015. Sales in the West declined 12.0% (-15.8% y/y) to 139,000, the lowest level in two years. In the South, home sales fell 1.5% (-11.4% y/y), the fifth decline in the last six months. Working 6.9% higher (4.1% y/y) were sales in the Midwest to 77,000, the highest level in four months.

The months' supply of homes on the market increased to 7.1 from 6.5 months during August. These figures were up sharply from the low of 4.5 months in July 2016. The median number of months a new home was on the market held steady  at 2.9, near the recovery low.

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

U.S. New Single-Family Home Sales (SAAR, 000s) Sep Aug Jul Sep Y/Y % 2017 2016 2015
Total 553 585 603 -13.2 616 560 502
  Northeast 19 32 24 -51.3 40 32 25
  Midwest 77 72 68 4.1 72 69 61
  South 318 323 343 -11.4 341 317 286
  West  139 158 168 -15.8 164 142 130
Median Price (NSA, $) 320,000 319,200 329,700 -3.5 321,633 306,500 293,733
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