New Home Sales in U.S. Dive 8.9 Percent in October
According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes fell to a seasonally adjusted annual rate of 544,000 units in October 2019 after an upwardly revised September 2019 report. This is the lowest sales pace since December 2016. However, on a year-to-date basis, sales are up 2.8 percent from this time in 2017.
"The November reading is consistent with reports from our builders, who say that the job market and demographic tailwinds bode well for housing demand but rising interest rates and home prices are forcing customers to take a pause," said Randy Noel, chairman of the National Association of Home Builders. "Policymakers should see this drop in sales as an indicator that housing affordability will continue to slow down the market."
"Home sales declined this month as housing affordability continues to be a hurdle for consumers," said NAHB Senior Economist Danushka Nanayakkara-Skillington. "While a solid economy and positive demographics support future demand for housing, it is critical to address this mounting affordability crisis."
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the October reading of 544,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale rose to 336,000 in October. The median sales price fell 3.6 percent to $309,700, as the market is shifting to townhomes and other lower-cost houses.
Looking at the regional numbers on a year-to-date basis, new home sales rose 6.3 percent in the Midwest, 4.1 percent in the West, and 3.8 percent in the South. Home sales fell 17.1 percent in the Northeast year-to-date.
The Mortgage Bankers Association's Chief Economist Mike Fratantoni tells The World Property Journal, "New home sales fell in October and are running substantially behind last year's pace. However, the September number was revised up substantially. The hurricanes in the South and wildfires in the West likely impacted both months' numbers, and continue to cloud the picture of the housing market's overall strength. The strong job market and rising wages should continue to support housing demand, but the lack of affordability has been a major constraint this year. The increase in supply on the market will be a positive as we move into 2019."
According to the National Association of Realtors, existing-home sales increased in October after six straight months of decreases. Three of four major U.S. regions saw gains in sales activity last month.
According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending November 9, 2018, U.S. mortgage applications decreased 3.2 percent from one week earlier.
According to the recently released CBRE U.S. Seniors Housing & Care Investor Survey, the appetite for senior housing acquisitions in the U.S. remains strong, with nearly two-thirds of investors planning to increase the size of their portfolios over the next 12 months.
According to Freddie Mac latest Primary Mortgage Market Survey for the first week of September 2018, U.S. mortgage rates jumped over the past week to a level not seen in over a month.
According to a new report by the California Association of Realtors, California's median home price edged higher to another peak in June 2018 as year-over-year home sales lost steam for the second straight month.
According to ATTOM Data Solutions recent analysis of what California's housing market would look like if the state is split into three new states per a proposal that has qualified for the state's November 2018 ballot.
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