New-Home Sales Rise 5.3 Percent In September
October 26, 2006
Sales of new single-family homes rose 5.3 percent in September to a seasonally adjusted annual rate of 1.075 million units, according to figures released by the U.S. Commerce Department today. The increase followed downward revisions to the sales rate for the previous three months, and the sales pace was down 14.2 percent from a year ago.
“Recent declines in mortgage interest rates and energy prices have buoyed consumer attitudes and home buyer demand,” said David Seiders, chief economist at the National Association of Home Builders (NAHB). “Surveys of consumer sentiment show that increasing numbers of households view this as a good time to buy homes.”
The Commerce Department reported that the median price of new homes sold in September was $217,000, 9.7 percent below a year earlier. Seiders noted, however, that the monthly price numbers are notoriously volatile.
For the third quarter as a whole, the Commerce Department reported that the median sales price was down by 1.7 percent on a year-over-year basis. “This price adjustment is more reflective of what’s actually going on in the housing market,” Seiders said.
The inventory of new homes for sale fell for the second consecutive month in September to 557,000 units, equivalent to a 6.4 months’ supply at the current sales pace. Completed homes for sale were 28 percent of the inventory. Units still under construction represented nearly 56 percent of the inventory, and units for-sale that were permitted but not yet started represented 16 percent of the inventory level.
The median length of time that completed homes for sale were on the market was 3.5 months, the same as in August and down from 3.8 months a year earlier.
Two of four regions across the country posted increases in the pace of new homes sales in September. Sales were up in the South by 6.9 percent and in the West by 23.9 percent. The sales rate was down by 34.5 percent in the Northeast and by 6.3 percent in the Midwest for the month. All four regions reported a substantially lower sale rate than a year ago.