Even though sales of new homes fell in September, the housing sector remains on firm footing overall. Here’s why:
What is the New Home Sales report? The New Home Sales report shows the number of newly constructed homes with a committed sale each month. The level of sales indicates housing market trends and housing demand. The monthly supply also serves as a clue to the level of housing pressure.
What’s happened recently? The Commerce Department reported that September New Home Sales fell 11.5 percent from August to an annual rate of 468,000 units, below the 550,000 expected. The Northeast was hardest hit in September, with a nearly 62 percent decline from August. This could be due to a cooling market or a lack of supplyÂ—with builders unable to keep up with housing demands and unprepared to start projects heading into winter.
What’s the bottom line? The silver lining is that sales of new homes in August were up 15.2 percent from August 2014, and September’s sales were up 2 percent when compared to September of last year. In addition, as noted above, sales of existing homes, which make up a much larger percentage of homes sales each month, also rose in September.
I’ll continue to monitor housing reports closely, but if you have any immediate questions, please call or email today.