Steel Markets

New Home Sales Plummet in October

Written by Sandy Williams

Sales of new single-family homes dropped 8.9 percent to a seasonally adjusted annual rate of 544,000 from an upwardly revised September estimate of 597,000 units, according to the latest data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. October sales were at the lowest sales pace since December 2016 and were 12.0 percent below October 2017.

The median sales price of new houses sold in October was $309,700 and the average sales price was $395,000. An estimated 336,000 new homes were for sale at the end of October, a supply of 7.4 months at the current sales rate. The supply is well over the accepted market balance of six months, as well as at the highest supply level since February 2011.

“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.”

Sales declined sharply in all four regions, tumbling 22.1 percent in the Midwest, 18.5 percent in the Northeast, 7.7 percent in the South and 3.2 percent in the West. Notably, sales were at their lowest level in the Northeast since September 2015 and at a two and one-half year low in the Midwest. New home sales in the South were at their lowest level since July of last year.

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