U.S. new home sales hit six-month high; median price stays above $400,000 -Breaking
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© Reuters. FILEPHOTO: While new construction is underway in Tampa, Florida (USA), May 5, 2021, builders are still working on the building of townhomes. REUTERS/Octavio JonesWASHINGTON, (Reuters) – Sales of single-family houses in the United States rose to a record six month high in September. However, rising house prices are making homeownership more expensive for first-time buyers.
The Commerce Department reported Tuesday that new home sales rose 14.0% to an adjusted annual rate last month of 800,000. This was the highest point since March. August’s sales rate was revised to 702,000 units down from previously reported 740,000. Both the South and the Northeast saw sales growth, along with the West. However, they fell in the Midwest.
Reuters polled economists to forecast that new home sales would increase at a rate greater than 760,000 units. They account for over 10% of U.S. house sales. On a year to date basis, September saw sales decline by 17.6%. The peak was at 993,000 units per month in January. This is the highest level since 2006.
Early in the COVID-19 epidemic, housing demand soared amid a mass exodus of people from cities to suburban areas and low-density places as they sought larger homes for online learning and their home offices. With the COVID-19 vaccinations, workers have returned to their offices. Schools are now open for students to learn in person.
From a year earlier, the median price of a new home increased 18.7% to $408,800 in September. Sales remained concentrated within the $200,000-$749,000 range. The most sought-after market segment, sales in the below-$200,000 price range, was responsible for just 2%.
About 74% were under construction, or still being built. In August, there were still 379,000 homes for sale. The inventory was composed 62.5% by houses under construction, and 28% by homes still to be constructed.
Because of tight supply chains, key inputs like steel are not available in sufficient quantities to support builders. While lumber for framing is still expensive, labor and certain household appliances remain scarce.
Last week, the government announced that September saw a decline in housing starts and permits.
It would take approximately 5.7 months for the inventory of homes to be sold at September’s pace, down from August’s 6.5 month.
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