In October 2019, U.S. new-home sales dropped to the lowest level recorded since March 2016, per new data from the Department of Commerce.
All four U.S. regions experienced major declines, pointing to the impact of rising mortgage rates on the national housing market. Sales of these homes decreased 8.9 percent in October to a seasonally adjusted annual rate of 544,000 units, the biggest drop since December 2017, and fell 12 percent annually. These results run counter to a recent economists' poll done by Reuters that had forecasted 3.7 percent growth for the month. New-home sales account for approximately 9.4 percent of total sales.
The median new house price fell 3.1 percent to $309,700 in October from a year ago. There were 336,000 new homes on the market in October, the most since January 2009 and up 4.3 percent from September. Supply is, however, just over half of what it was at the peak of the housing market boom in 2006.
At October’s sales pace it would take 7.4 months to clear the supply of houses on the market, the most since February 2011, from 6.5 months in September. Nearly two-thirds of the houses sold last month were either under construction or yet to be built.
Advertisement
Related Stories
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable
Market Data + Trends
10 States Where Home Insurance Rates Have Risen the Most
Responding to the increasing number of natural disasters, insurers are hiking prices, with some states bearing the brunt more than others
