WASHINGTON (10/27/15)--New-home sales dropped 11.5% in September, more than reversing August’s solid gains, according to Census Bureau numbers released this week (Economy.com Oct. 26).
Sales remain 2% higher on a year-over-year basis, but the monthly drop could signal a forthcoming cooler stretch.
“Given the greater volatility of the new-home market due to its smaller volume and higher prices, the decline in September sales should not come as a shock,” said Andres Carbacho-Burgos, Moody’s analyst (Economy.com). “The 2015 numbers do, however, indicate that the new-home market is slowing even if it is not entering a correction stage; if the volatility is smoothed out, new-home sales have leveled off this year after rising at a moderate pace between 2011 and 2014.”
All four census regions recorded declines in September, with the Northeast posting the largest drop at a massive 61.8% decline. Sales fell 8.3% in Midwest, 8.7% in the South and 6.7% in the West.
Meanwhile, new-home prices increased during the month.
The percentage of homes sold priced below $300,000 fell to 51% from 53%, while the percentage of homes sold priced higher than $300,000 climbed to 49% from 47%.
Driven by a diminishing supply, non-seasonally adjusted median new-home price growth rose to 13.5%, the highest rate of annual growth since last year.
“Despite three years of moderate increases, new-home sales totals are still back at what they were in the early 1990s,” Carbacho-Burgos said. “While part of this decline is due to demographics and a decline in the share of households of prime home-buying age, it is also reflective of the uneven nature of the U.S. economic recovery.”