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Economy in Brief

U.S. New Home Sales Ease in September as Prices Rise
by Tom Moeller  October 26, 2020

• New single-family home sales slipped but remain sharply higher y/y.

• Sales declined modestly throughout most of the country.

The market for new single-family homes has cooled recently. Sales declined 3.5% (+32.1% y/y) to 959,000 (AR) during September from 994,000 in August, revised from 1.011 million. Sales had rebounded at double-digit rates m/m during the prior three months from their 570,000 low in April. The Action Economics Forecast Survey expected a rise in sales to 1.023 million last month.

Purchases of new homes eased m/m throughout most of the country. Sales were weakest in the Northeast where they fell 28.9% (-5.9% y/y) to 32,000, off 38.5% during the last three months. Sales in the South fell 4.7% (+27.4% y/y) to 563,000, but were still near the highest sales level since the middle of`2006. Sales in the Midwest declined 4.1% (+34.8% y/y) to 93,000, up from the recession low of 74,000. Elsewhere in the country, sales improved. Sales in the West increased 3.8% (49.7% y/y) to 271,000, the highest level since Q2'06, nearly double the April low.

The median price of a new home rose 1.4% (3.5% y/y) to $326,800 in September. Prices have been moving irregularly sideways since the middle of 2017. The average price of a new home jumped 5.9% (8.9% y/y) to a record $405,400 in September. These prices are not seasonally adjusted.

The months' supply of new homes on the market remained low in September at 3.6 months, down from the April high of 6.8 months. The median number of months a new home stayed on the market slipped to 4.0 months in September, up from 3.5 months twelve months earlier.

New home sales activity and prices 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 % 2019 2018 2017
Total 959 994 965 32.1 685 614 616
  Northeast 32 45 43 -5.9 30 32 40
  Midwest 93 97 127 34.8 72 75 72
  South 563 591 554 27.4 400 347 341
  West 271 261 241 49.7 183 160 164
Median Price (NSA, $) 326,800 322,400 329,900 3.5 319,267 323,125 321,633
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