Steel Markets

New Home Sales Flat in October, But Gains Expected

December 1, 2020

Sales of new single-family homes were flat in October, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The seasonally adjusted annual rate of 999,000 was 0.3 percent below the September revised rate of 1,002,000, although it soared 41.5 percent above the October 2019 estimate.

“Buyer traffic remained strong in October even as the country’s attention was focused on the elections and policy issues going into 2021,” said NAHB Chairman Chuck Fowke. “Mortgage rates remain low and builder confidence is at an all-time high indicating that demand remains steady and sales will remain solid.”

Sales during the month were primarily in the Northeast and Midwest with sequential monthly gains of 5.1 percent and 11.2 percent, respectively. New home sales fell 2 percent in the South and 1.5 percent in the West.

Median sales price was $330,600 and the average sales price was $386,200. An estimated 278,000 new homes were for sale at the end of October, a tight 3.3-month supply at the current sales rate. Only 44,000 of the homes in the October inventory were finished and ready for occupancy.

“NAHB analysis showed that the gap between construction and sales was at an all-time high in early fall. Thus, the NAHB forecast contains an acceleration in single-family starts and some slowing of the pace of growth for new homes sale to allow a catch-up,” said NAHB Chief Economist Robert Dietz. “Demand remains strong as home buyers seek out lower density markets as part of the suburban shift.”