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Economy in Brief

U.S. New Home Sales and Prices Remain Sluggish
by Carol Stone, CBE  November 28, 2018

The market for new homes is continuing to weaken. New single-family home sales fell 8.9% (-12.0% y/y) in October to 544,000 (SAAR). It was the fourth decrease in the last five months and carried sales down to their lowest since March 2016. Revisions to previous months' sales were positive, however: those in September, originally reported at 553,000, were revised to 597,000, and those in August, which had been reported last month at 585,000, were revised to 591,000. The October result did undershoot the expectations in the Action Economics Forecast Survey, which had estimated 585,000 sales. These sales transactions are recorded when sales contracts are signed or deposits are made.

The median price of a new home fell 3.6% (-3.1% y/y) in October to $309,700 from $321,300 in September. The average price of a new home rose, however, to $395,000 (+0.3% y/y) from $379.000 in September.

By region, the largest percentage decline last month was in the Midwest, where sales fell 22.1% (-16.7% y/y) to 60,000. Those in the Northeast dropped 18.5% m/m (-46.3% y/y) to 22,000. In the South, sales were off 7.7% in October (-11.6% y/y) to 313,000, while those in the West eased 3.2% (-6.3% y/y) to 149,000.

The months' supply of homes on the market increased to 7.4 in October from 6.5 months during September. These figures were up sharply from the recent low of 4.5 months in July 2016. The median number of months a new home was on the market after its completion edged down from 2.9 in September to 2.7 in October; this is the shortest for-sale period in the history of this series, which dates from 1975.

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) Oct Sep Aug Oct Y/Y % 2017 2016 2015
Total 544 597 591 -12.0 616 560 502
  Northeast 22 27 33 -46.3 40 32 25
  Midwest 60 77 67 -16.7 72 69 61
  South 313 339 336 -11.6 341 317 286
  West  149 154 155 -1.3 164 142 130
Median Price (NSA, $) 309,700 321,300 323,800 -3.1 321,633 306,500 293,733
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