New Home Sales Jumped 12.3 Percent in September, Despite Rising Mortgage Rates

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After slumping the previous month, new home sales in September were at a seasonally adjusted annual rate of 759,000, up 12.3% compared with August and up 33.9% compared with September 2022, according to estimates from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

The median sales price of a new home sold in September was $418,800. The average sales price was $503,900.

As of the end of the month, there were about 435,000 new homes available for sale in the U.S. – about a 6.9-month supply at the current sales rate.

In general, new home sales have been strong thus far in 2023, despite rising mortgage rates, due to strong demand from first-time homebuyers. This is due mainly to lack of supply of existing homes. As a result, new home sales on average now represent a larger share of overall sales than they have historically.

However, in August, new home sales slumped, due mainly to mortgage rates hitting new highs near 8%. As a result of higher rates, new home sales are likely to see some fluctuation in the months to come.

Last week the Mortgage Bankers Association reported that applications for mortgages for new home purchases dropped 12% in September compared with August but were up 14.9% compared with September 2022.

Photo: Alexander Andrews

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