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Sales of newly built homes continued a free-fall in September, according to data released Wednesday by the U.S. Census Bureau.
New home sales dropped 10.9 percent from August 2022 levels to a seasonally adjusted annual rate of 603,000, 17.6 below the levels recorded in September 2021, according to the new data.
The median sales price of a newly built single family home hovered at $470,000, up from the median sales price of $436,000 in August, while the average sale price clocked in at $517,700, down from the August average of $521,000.
The seasonally adjusted estimate of new homes for sale at the end of September stood at 462,000, representing a supply of 9.2 months at the current sales rate, flat from the levels seen in August but a significant expansion of the inventory levels seen just months ago as builders have trouble filling homes.
Lisa Sturtevant | Image: Bright MLS
“Even though many builders are holding up on starting new projects, the inventory of new homes has expanded quickly over the past few months as sales have diminished,” Bright MLS Chief Economist Lisa Sturtevant said in a statement. “Buyers who remain in the market will have more leverage on price and will be offered incentives and upgrades by builders for quick move-ins, which were virtually unheard of during the pandemic.”
In August, sales of new homes shot up dramatically, clocking in at a seasonally adjusted annual rate of 685,000 — 28.8 percent higher than the July figure of 532,000, but 0.1 percent down from August 2021, with September’s downward trend representing a reversal. Economists theorized that August’s surge in sales were partly a product of buyers rushing to lock in a rate when mortgage rates started to move upwards again, with rates now topping 7 percent, and that the jump seen in August wouldn’t last.
Danielle Hale | Photo credit: realtor.com
“The reprieve from mortgage rates was relatively short lived this summer and as mortgage rates near 7 percent few buyers can afford today’s price levels,” Realtor.com Chief Economist Danielle Hale said in a statement. “The current market requires that buyers spend more of their monthly budget housing, which is a non-starter for some families who are already stretching their budget to the breaking point.”
The regional breakdown showed stronger sales in the more affordable Northeast and Midwest, where sales increased 56 and 4.3 percent respectively when compared to the South where sales decreased by 20.2 percent, and the West where they fell 0.7 percent monthly, mirroring the regional sales pattern of existing home sales.
