New-home sales saw a slight increase of 0.4% in October

ARLINGTON, Va.—New-home sales saw a slight increase of 0.4% in October to 745,000 annualized units, while prior months saw a downward revision of 75,000 units. Compared to last year, October sales were 23.1% lower, according to new data.


Curt Long

“New home sales advanced by a modest amount in October, and those gains were swamped by downward revisions to prior months,” said NAFCU Chief Economist and Vice President of Research Curt Long. “The initial September sales estimate was downgraded from 800,000 to 742,000 units.”

October sales in the Midwest rose by 11%, followed by the South (+0.2%). Other Census regions saw a dip in new-home sales including the Northwest, which fell by 11.8%, and the West, which dropped by 1.1%.

Based on current month sales, the new federal data show there were roughly 6.3 months of supply in October, up by 0.2 months compared to September. Unsold homes left on the market increased by 10,000 homes to 389,000 in October, representing a 37% increase from year-ago inventory levels.

Sentiment Remains ‘Solid’

“Homebuilders are dealing with labor and supply shortages, and there are many reports of builders slowing sales through the difficulties. Homebuilder sentiment was solid in October, and rose in November to its highest level since the spring,” noted Long. “New home inventory levels are keeping pace with sales, and price increases have slowed lately.”

Of note, the median home price on a non-seasonally adjusted basis rose by 0.7% in October to $407,700, which is 17.5% higher than last year.

“Construction permits peaked in January and have since settled a bit lower, though still above pre-COVID levels,” concluded Long. “Until the supply chain unkinks, production and sales of new homes are likely to remain modest, which will maintain price pressures in the resale market.” 

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